Q2 2025 Taboola.com LTD Earnings Call

August 6, 2025

Operator: Good day. Thank you for standing by. Welcome to the Taboola Q2 2025 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will hear an automated message advising that your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. We would now like to hand the conference over to your first speaker today, Jessica Kourakos, Head of Investor Relations. Please go ahead.

Good day, and thank you for standing by. Welcome to the tabula second quarter 2025 earnings call.

At this time, all participants are in a listen-only mode.

After the speaker's presentation, there will be a question and answer session to ask a question during the session. You will need to press star 1, 1 on your telephone. You will then hear an automated message. Advising that your hand is raised

to withdraw your question. Please press star 1 1 again.

Please be advised that today's conference is being recorded.

Jessica Kourakos: Thank you. Good morning, everyone. Welcome to Taboola's Q2 2025 Earnings Conference Call. I'm here with Adam Singolda, Taboola's Founder and CEO, and Stephen Walker, Taboola's CFO. The company issued earnings materials today before the market. They are available to the investors section of Taboola's website. Now I'll quickly cover the safe harbor. Certain statements today, including our expectations for future periods, are forward-looking statements. They are not facts and are subject to material risks and uncertainties described in our SEC filings. These statements are based on currently available information. We undertake no duty to update them except as required by law. Today's discussion is also subject to the forward-looking statement limitations in the earnings press release. Future events could differ materially and adversely from those anticipated. During this call, we will use terms defined in the earnings release and refer to non-GAAP financial measures.

Jessica Kourakos: Thank you and good morning, everyone, and welcome to Taboola's second quarter 2025 earnings conference call. I'm here with Adam Singolda, Taboola's founder and CEO, and Steve Walker, Taboola's CFO. The company issued earnings materials today before the market, and they are available to the investor section of Taboola's website. Now, I'll quickly cover the stake harbor. Certain statements today, including our expectations for future periods, are forward-looking statements. They are not facts and are subject to material risks and uncertainties described in our SEC filing. These statements are based on currently available information, and we undertake no duty to update them except as required by law. Today's discussion is also subject to the forward-looking statement limitations in the earnings press release. Future events could differ materially and adversely from those anticipated. During this call, we will use terms defined in the earnings release and refer to non-GAAP financial measures.

You would now like to hand the conference over to your first Speaker today, Jessica karakos head of investor relations. Please go ahead

Thank you and good morning everyone and welcome to dula's second quarter 2025 earnings conference call. I'm here with Adamson gold at tulis founder and CEO and Steve Walker to Bull of CFO. The company issued, earnings materials today before the market and they are available to the investors section of tula's website.

Now, I'll quickly cover the Safe Harbor certain statements today, including our expectations for future periods. Are forward-looking statements, they are not facts and are subject to material risks and uncertainties described in our SEC filings. These statements are based on currently available information and we undertake no duty to update them except those required by law,

Jessica Kourakos: For definitions and reconciliations to GAAP, please refer to the non-GAAP tables in the earnings release posted on our website. With that, I'll turn the call over to Adam.

Adam Singolda: Thanks, Jessica. Good morning, everyone, and thank you all for joining us today. Let me start by saying that I'm happy with our Q2 performance and the momentum we're seeing since exiting the quarter. We delivered a strong Q2, beating the high end of our guidance across all key metrics, buying back about 12% of the company in just the H1, reflecting our confidence in the business and our long-term vision. As a result, we're raising full-year guidance across the board and are continuing to aggressively buy back shares. We're also seeing exciting early traction with Realize, our new performance advertising platform, and I truly believe we're just getting started. Before we go deeper on the quarter and our outlook, I want to quickly remind everyone who we are, the opportunity we're going after, and why we believe we can win.

Adam Singolda: Thanks, Jessica. Good morning, everyone, and thank you all for joining us today. Let me start by saying that I'm happy with our Q2 performance and the momentum we're seeing since exiting the quarter. We delivered a strong second quarter, bidding the high end of our guidance across all key metrics, buying back about 12% of the company in just the first half of the year, reflecting our confidence in the business and our long-term vision. As a result, we're raising full-year guidance across the board and are continuing to aggressively buy back shares. We're also seeing exciting early traction with Relive, our new performance advertising platform, and we truly believe we're just getting started. Before we go deeper on the quarter and our outlook, I want to quickly remind everyone who we are, the opportunity we're going after, and why we believe we can win.

Press release, future events could differ materially and adversely. From those anticipated during this call, we will use terms to find in the earnings release and refer to non-gaap financial measures for definitions and reconciliations to Gap. Please refer to the non-gaap tables in the earnings release posted on our website with that. I'll turn the call over to Adam.

Thanks Jessica. Good morning everyone and thank you all for joining us today.

Let me start by saying that I'm happy with our Q2 performance and the momentum. We're seeing since exiting the quarter,

We delivered a strong second quarter billing, the high end of our guidance, across all key, metrics buying back about 12% of the company, in just the first half of the Year, reflecting our confidence in the business, and our long-term vision.

As a result, we're raising full year guidance across the board and are continuing to aggressively buy back shares.

We're also seeing an exciting early traction with real life. Our new performance advertising platform and will truly believe we're just getting started.

Adam Singolda: Taboola is one of the largest performance advertising platforms on the open web. Our platform, Relive, helps businesses of all sizes get leads and grow sales. It operates similar to Google Ads or Meta Ads, offering a simple-to-use platform powered by AI. The key difference is that while Google reaches users in search and Meta in social, Relive engages 600 million people every day across the open web on publisher sites like Yahoo, NBC, ESPN, USA Today, Apple News, Samsung, and others, driving those people to action. Our competitive advantage lies in our AI and first-party data drawn from what people actually read about versus what people idealize of themselves in social media, giving advertisers authentic insights into user intent and high-performing outcomes.

Adam Singolda: Taboola is one of the largest performance advertising platforms on the open web. Our platform, Realize, helps businesses of all sizes get leads and grow sales. It operates similar to Google Ads or Meta Ads, offering a simple-to-use platform powered by AI. The key difference is that while Google reaches users in search and Meta in social, Realize engages 600 million people every day across the open web on publisher sites like Yahoo, NBC, ESPN, USA Today, Apple News, Samsung, and others, driving those people to action. Our competitive advantage lies in our AI and first-party data drawn from what people actually read about versus what people idealize of themselves in social media, giving advertisers authentic insights into user intent and high-performing outcomes.

Before we go deeper on the quarter and our Outlook, I want to quickly remind everyone who we are the opportunity to work on after and why you believe we can win.

Taboola is 1 of the largest performance advertising platforms. On the open web, our platform realized helps businesses of all sizes, get leads, and grow sales. It operates similar to Google ads or meta ads offering a simple to use platform powered by AI.

The key difference is that while Google reaches users in Search and meta in Social realized engages, 600 million people every day across the open web on publisher sites, like Yahoo, NBC, ESPN USA, Today, Apple news, Samsung and others driving those people to action.

Adam Singolda: In 2025, we expect nearly $2 billion in gross revenue and approximately $700 million in ex-tech gross profit, which is what we keep after we pay our partners and a key metric for our business. We expect to generate over $200 million in adjusted EBITDA at a 30% margin with strong free cash flow. As search and social advertisers are mixing out and can't get more growth, advertisers are looking for scalable, performance-driven alternatives. Taboola is uniquely positioned to take a share in what we estimate is a $55 billion opportunity and lead that shift across the open web. With that, we can turn to our second quarter results. Our second quarter revenues, ex-tech gross profit, and adjusted EBITDA all came in above the high end of our guidance range. With the second quarter, we reported revenues of $465 million, representing growth of 9% year over year.

Adam Singolda: In 2025, we expect nearly $2 billion in gross revenue and approximately $700 million in Ex-TAC gross profit, which is what we keep after we pay our partners, and a key metric for our business. We expect to generate over $200 million in adjusted EBITDA at a 30% margin with strong free cash flow. As search and social advertisers are maxing out and can't get more growth, advertisers are looking for scalable, performance-driven alternatives. Taboola is uniquely positioned to take a share in what we estimate is a $55 billion opportunity and lead that shift across the open web. With that, we can turn to our Q2 results. Our Q2 revenues, Ex-TAC gross profit, and adjusted EBITDA all came in above the high end of our guidance range. With the Q2, we reported revenues of $465 million, representing growth of 9% year over year.

Our competitive advantage lies in our AI and first-party data drawn from what people actually read about versus what people idealize about themselves on social media, giving advertisers authentic insights into user intent and high-performing outcomes.

In 2025, we expect nearly 2 billion dollars in gross revenue, and approximately 700 million in X Tech gross profit, which is what we keep after we pay our partners and a key metric for our business.

We expect to generate over million dollars, in adjusted ebam at a 30% margin with strong free cash flow.

As search and social advertisers are mixed in out and can't get more growth. Advertisers are looking for, scalable performance-driven alternatives,

Taboola is uniquely positioned to take a share in what we estimate is a 55 billion opportunity and need that shift across the open web.

With that, we can turn to our second quarter results.

Adam Singolda: Ex-TAC gross profit of $172 million, 15% higher than last year. Adjusted EBITDA of $45 million, 21% higher than last year, with margin expanding significantly. Finally, free cash flow of $34 million, grew 31% year-over-year, allowing us to buy back about $100 million worth of stock in the quarter. In addition, we're pleased to announce that our board has approved an incremental $200 million to our share repurchase program, reflecting our confidence in the long-term value of the business. Moving to our quarterly highlights. As we discussed at our investor day, accelerating Ex-TAC gross profit is our North Star because it ultimately fuels our strong profitability and free cash flow generation. When you look at the 15% growth we saw in Ex-TAC this quarter, it was primarily driven by three things.

Adam Singolda: Ex-tech gross profit of $172 million, 15% higher than last year. Adjusted EBITDA of $45 million, 21% higher than last year, with margin expanding significantly. And finally, free cash flow of $34 million, growth 31% year over year, allowing us to buy back about $100 million worth of stock in the quarter. In addition, we're pleased to announce that our board has approved an incremental $200 million to our share repurchase program, reflecting our confidence in the long-term value of the business. Moving to our quarterly highlights. As we discussed at our investor day, accelerating ex-tech gross profit is our North Star because it ultimately fuels our strong profitability and free cash flow generation. When you look at the 15% growth we saw in ex-tech this quarter, it was primarily driven by three things.

Our second quarter, revenues xstack, gross profit and adjusted ebida. All came in about the high end of our guidance range with the second quarter, we reported revenues of 465 million representing growth of 9% year-over-year,

Growth profit of 172 million 15% higher than last year.

Adjusted ebida of 45 million 21%, higher than last year with marginal expending significantly.

And finally free cash flow of 34 million with 31% year-over-year, allowing us to buy back about a hundred million dollars worth of stock in the quarter.

In addition, we're pleased to announce that our board has approved an incremental, 200 million to our share repurchase program reflecting our confidence in the long-term value of the business.

Moving to our quarterly highlights.

As we discussed at our investor day accelerating access. Gross profit is our North Star, because it ultimately fuels our strong profitability and free cash flow generation.

Adam Singolda: First, we saw nearly 9% growth in the number of scaled advertisers, which are those spending over $100,000 in the last 12 months. This means they see good return with Taboola and are likely to stick around. Revenue from scaled advertisers represents the vast majority of our revenue. Second, the average revenue per scaled advertiser rose about 2% versus last year. The third was an easier comparison in the first half, given Yahoo was fully ramped by the end of the second quarter. As we shared last quarter, our top priority for accelerating growth is the success of Relive, our new performance ad platform. Relive expands our reach beyond native advertising into the broader performance market, across display and social, unlocking new opportunities for growth.

Adam Singolda: First, we saw nearly 9% growth in the number of scaled advertisers, which are those spending over $100,000 in the last 12 months. This means they see good return with Taboola and are likely to stick around. Revenue from scaled advertisers represents the vast majority of our revenue. Second, the average revenue per scaled advertiser rose about 2% versus last year. The third was an easier comparison in the H1, given Yahoo was fully ramped by the end of the Q2. As we showed last quarter, our top priority for accelerating growth is the success of Realize, our new performance ad platform. Realize expands our reach beyond native advertising into the broader performance market across display and social, unlocking new opportunities for growth.

When you look at the 15% growth, we saw an extract this quarter. It was primarily driven by 3 things.

First, we saw nearly 9% growth in the number of scaled advertisers, which are those spending over $100,000 in the last 12 months.

This means they see good return with taboola and are likely to stick around.

Revenue from scaled advertisers represents the vast majority of our Revenue.

Second, the average revenue per scaled Advertiser Rose about 2% versus last year.

Second quarter.

As we showed last quarter, our top priority for accelerating, growth is the success of real life. Our new performance ad platform.

Adam Singolda: This expansion is important as it not only allows us to capture larger budgets from existing advertisers but also work with new advertisers and agencies who have never bought native before. While it's still early days and not yet material financially, we're encouraged by the momentum we're seeing as 650 advertisers have already tested our new display and social capabilities since the February launch. Let me share a few Q2 examples that showcase the kind of performance advertisers are already seeing with Relive. One good example is a company in the aviation space that never worked with us before. With Relive, they tried our new display capability, which means they could import their display creatives into Relive. They shared their performance objective, and we were able to beat their performance goal by 34% and maximize travel bookings on their platform.

Adam Singolda: This expansion is important as it not only allows us to capture larger budgets from existing advertisers, but also work with new advertisers and agencies who have never bought native before. While it's still early days and not yet material financially, we're encouraged by the momentum we're seeing as 650 advertisers have already tested our new display and social capabilities since the February launch. Let me share a few Q2 examples that showcase the kind of performance advertisers are already seeing with Realize. One good example is a company in the aviation space that never worked with us before. With Realize, they tried our new display capability, which means they could import their display creative into Realize, they shared their performance objective, and we were able to beat their performance goal by 34% and maximize travel bookings on their platform.

Realize expands our reach Beyond native advertising into the broader performance markets, across the display and social unlocking, new opportunities for growth.

This expansion is important as it not only allows us to capture larger budgets from existing advertisers.

But also work with new advertisers and agencies who have never bought native before.

While it's still early days and not yet material, financially or encouraged by the momentum, we're seeing at 650, advertisers have already tested, our new display and social capabilities, since the February launch.

Let me share a few Q2 examples that showcase the kind of performance advertisers are already seen with real life.

1. Good example is a company in the Aviation Space that never worked with us before.

Adam Singolda: This success led to increased spend with us, which is exactly what you want to see in this type of cases. Another example I like is in the real estate space. One of our existing advertisers who has bought native advertising from us for two years now was interested in finding new ways to grow. Their goal was to drive more local awareness to their modular home in specific locations around the country. While their native spend was growing with Relive's new capabilities by importing their vertical display campaigns, they were able to see stronger overall conversion rates. This improved their return on ad spend, and as a result, they grew their display budget by 65% and are still growing. These are just a few examples, but they're consistent with what we're seeing more broadly in our early tests with customers.

Adam Singolda: This success led to increased spend with us, which is exactly what you want to see in these type of cases. Another example I like is in the real estate space. One of our existing advertisers who has bought native advertising from us for 2 years now was interested in finding new ways to grow. Their goal was to drive more local awareness to their modular homes in specific locations around the country. While their native spend was growing with Realize new capabilities by importing their vertical display campaigns, they were able to see stronger overall conversion rates. This improved their return on ad spend, and as a result, they grew their display budget by 65% and are still growing. These are just a few examples, but they're consistent with what we're seeing more broadly in our early tests with customers.

With real life, they tried their new display capability, which means they could import their display creative into realized, they shared their performance objective, and we were able to beat the performance goal by 34% and maximize travel bookings on their platform.

This success led to increased spend with us, which is exactly what you want to see in this type of cases.

Another example, I like is in the real estate Space 1 of our existing advertisers who has bought native advertising from us for 2 years now was interested in finding new ways to grow.

Their goal was to drive more local awareness to their modular homes in specific locations around the country.

While their native spend was growing with realized new capabilities, by importing their vertical display campaigns.

They were able to see stronger overall conversion rates.

This improves the return on ad spend. And as a result, they grew their display budget by 65% and are still growing.

Adam Singolda: Realize is helping advertisers drive better performance outcomes at scale on the open web, which we believe will translate into incremental dollars being spent on our network. We're just getting started. Now moving to our unique supply initiative. While attracting more ad spend for Taboola and our existing publisher partners is our main priority, we're also hard at work adding incredible new open web partners who have unique supply and data that performance advertisers really want. Taboola News is a great example of unique supply and is seeing double-digit growth. Advertisers love Taboola News because it gives them a way to reach consumers before they enter social media, before they open and browse the web at a high intent, high impact moment. It delivers strong performance in return.

Adam Singolda: Relive is helping advertisers drive better performance outcomes at scale on the open web, which we believe will translate into incremental dollars being spent on our network, and we're just getting started. Now moving to our unique supply initiative. While attracting more ad spend for Taboola and our existing publisher partners is our main priority, we're also hard at work adding incredible new open web partners who have unique supply and data that performance advertisers really want. Taboola News is a great example of unique supply and is seeing double-digit growth. Advertisers love Taboola News because it gives them a way to reach consumers before they enter social media, before they open and browse the web at a high intent, high-impact moment, and it delivers strong performance in return.

These are just a few examples but they're consistent with what we're seeing. More broadly in our early tests with customers realize is helping advertisers drive better performance outcomes at scale on the open web which we believe will translate into incremental dollars being spent on our Network and we're just getting started.

Now, moving to our unique Supply initiative.

While attracting more ad spend for tibula and our existing publisher Partners is our main priority. We're also hard at work. Adding incredible new open web Partners who have unique Supply and data that performance advertisers really want.

Taboola news is a great example of unique Supply and is seen double-digit growth.

Adam Singolda: Another point of strength that is worth noting as it relates to our publisher partners is the minimal effect we're experiencing from LLM-driven changes in search dynamics. There are two key factors that help minimize the impact on Taboola as well as our publisher partners. First, we're fortunate that the vast majority of our publisher partners are top-tier enterprises, including names like ESPN, USA Today, CNBC, and Nexstar, who benefit from strong brand recognition and loyal audiences. As a result, they enjoy substantial direct traffic, with search traffic typically accounting for just about 30% to 40% of their total. Second, a significant portion of our revenue comes from open web platform partnerships such as Yahoo, Microsoft, Apple, Samsung, and others, which receive little to no search traffic to begin with.

Advertisers love to use because it gives them a way to reach consumers before they enter social media before they open. And browse the web at a high intent, high impact moments and it delivers strong performance in return.

Another point of strength that is worth noting as it relates to our publisher Partners is the minimal effect where experiencing from llm driven changes in search Dynamics.

There are 2 key factors that help minimize the impact on taboola as well as our publisher partners.

First, we're fortunate that the vast majority of our publisher partners are top tier Enterprises, including names, like ESPN and USA Today. CNBC and nexstar who benefits from strong brand recognition and loyal audiences. As a result. They enjoy substantial direct traffic with search traffic typically accounting for just about 30 to 40% of their total.

Adam Singolda: These two pillars of our supply base have helped our publishers stay strong, as well as us, maintaining a blended search traffic share of around 5%. To date, we have not seen material impact from recent changes in the search market driven by LLM. Performance remains stable, with year-to-date effects limited to the mid-single digit. In summary, when I look at the open web, I see a major opportunity for the market and for us. Advertisers need alternatives to search and social in all parts of the open web. Companies like the Trade Desk have done a great job capturing top-of-the-funnel video and CTV campaigns, and AppLovin has excelled in the app ecosystem. And there is a massive opportunity to become the performance advertising company for everything else: mobile, desktop, OEM, messaging apps, and more.

Adam Singolda: These two pillars of our supply base have helped our publishers stay strong, as well as us maintaining a blended search traffic share of around 5%. To date, we have not seen material impact from recent changes in the search market driven by LLM. Performance remains stable with year-to-date effects limited to the mid-single digits. In summary, when I look at the open web, I see a major opportunity for the market and for us. Advertisers need alternative to search and social in all parts of the open web. Companies like The Trade Desk have done a great job capturing top-of-the-funnel video and CTV campaigns, and AppLovin has excelled in the app ecosystem. There is a massive opportunity to become the performance advertising company through everything else, mobile, desktop, OEM, messaging apps, and more.

Second a significant portion of our Revenue comes from open web platform Partnerships such as Yahoo, Microsoft, Apple, Samsung, and others, which received little to no search traffic to begin with.

These 2 pillars of our supply base and helped our Publishers, stay strong as well. As us maintaining a blended search traffic share of around 5%.

To date. We have not seen material impact from recent changes in the search Market driven by llm.

Performance remains stable with ear to date affect limited to the mid single digits.

in summary, when I look at the open web, I see a major opportunity for the market and for us,

Parts of the open web companies like the trade desk, have done a great job, capturing top of the funnel video and CTV campaign, an app loving has excelled in the app ecosystem.

Adam Singolda: And that's exactly what we're focused on, and Relive is the key to unlocking our true potential in this market. I'm so proud of our teams for the way we're executing in the first half, for launching Relive and getting existing and new clients, hundreds of them, to try it out. As we're getting more budget, it means we're able to generate even more revenue for our partners, making our share of wallets greater. There is a lot of momentum we're seeing. We beat our Q2 guidance. We're raising our full-year guidance. We're generating meaningful cash flow, which allows us to invest in the business and buy a lot of shares back. With that, I'll hand it over to Steve to walk you through our Q2 results and outlook in more detail.

Adam Singolda: That's exactly what we're focused on and Realize is the key to unlocking our true potential in this market. I'm so proud of our teams for the way we're executing in H1, for launching Realize and getting existing and new clients, hundreds of them, to try it out. We're getting more budgets, it means we're able to generate even more revenue for our partners, making our share of wallets greater. There is a lot of momentum we're seeing. We beat our Q2 guidance. We're raising our full-year guidance. We're generating meaningful cash flow, which allow us to invest in the business and buy a lot of shares back. With that, I'll hand it over to Steve to walk you through our Q2 results and outlook in more detail.

And there is a massive opportunity to become the performance advertising company for everything else. Mobile desktop, OEM messaging apps and more. And that's exactly what we're focused on and realize is the key to unlocking. Our true potential in this market

I'm so proud of our teams for the way. We're executing in the first half for launching real life. Again, existing annual clients hundreds of them to try it out.

as we're getting more budgets, it means we're able to generate even more revenue for our partners, making our share of wallet, greater

Steve Walker: Thanks, Adam, and good morning, everyone. As Adam mentioned, we had a strong first half of the year. In the second quarter, we reported results above the high end of our guidance across all key metrics. Second quarter revenues reached $465.5 million, representing 8.7% year-over-year growth. Our revenue growth this quarter was driven by an 8.5% year-over-year increase in the number of scaled advertisers, coupled with a 1.8% year-over-year increase in average revenue per scaled advertiser. This reflects strong execution on both acquiring new advertisers and deepening relationships with existing ones. While these two metrics can sometimes move in opposite directions, as newer advertisers typically start at lower spend levels, this quarter saw broad-based strength across both, which is a positive signal for the health and momentum of our business.

Stephen Walker: Thanks, Adam, good morning, everyone. As Adam mentioned, we had a strong H1 of the year. In Q2, we reported results above the high end of our guidance across all key metrics. Q2 revenues reached $465.5 million, representing 8.7% year-over-year growth. Our revenue growth this quarter was driven by an 8.5% year-over-year increase in the number of scaled advertisers, coupled with a 1.8% year-over-year increase in average revenue per scaled advertiser. This reflects strong execution on both acquiring new advertisers and deepening relationships with existing ones. While these two metrics can sometimes move in opposite directions, as newer advertisers typically start at lower spend levels, this quarter saw broad-based strength across both, which is a positive signal for the health and momentum of our business.

There's a lot of momentum. We're seeing we beat our Q2 guidance, we're raising our full year guidance, we're generating meaningful cash flow which allows us to invest in the business and buy a lot of shares back with that. I'll land it over to Steve to walk you through our Q2 results and Outlook in more detail.

Thanks Adam and good morning everyone. As Adam mentioned, we had a strong first half of the year in the second quarter. We reported results above the high end of our guidance across all key metrics.

second quarter revenues reached 465.5 million representing 8.7% year-over-year growth

Our Revenue growth, this quarter was driven by an 8.5% year-over-year. Increase in the number of scaled advertisers coupled with a 1.8% year-over-year increase in average revenue per scaled Advertiser.

This reflects strong execution, on both acquiring new advertisers and deepening relationships with existing ones.

Steve Walker: As I have said in the past, I'm particularly encouraged by the growth in the number of advertisers because they are essentially the fuel for our future growth. Ex-tech gross profit reached $172.1 million, representing 15.1% year-over-year growth. This included a 45 basis point tailwind from foreign exchange rates. Growth was primarily driven by higher advertising spend, margin expansion on certain digital publishers, and strong contributions from Taboola News and bidded supply. The growth rate also benefited from a favorable comparison to last year due to the onboarding of Yahoo advertisers. Gross profit for the quarter was $135.6 million, primarily benefiting from strong ex-tech gross profit growth.

Stephen Walker: As I have said in the past, I'm particularly encouraged by the growth in the number of advertisers because they are essentially the fuel for our future growth. Ex-TAC gross profit reached $172.1 million, representing 15.1% year-over-year growth. This included a 45 basis point tailwind from foreign exchange rates. Growth was primarily driven by higher advertising spend, margin expansion on certain digital publishers, and strong contributions from Taboola News and Bidded Supply. The growth rate also benefited from a favorable comparison to last year due to the onboarding of Yahoo advertisers. Gross profit for the quarter was $135.6 million, primarily benefiting from strong Ex-TAC gross profit growth.

While these two metrics can sometimes move in opposite directions as newer advertisers typically start at lower spend levels. This quarter saw broad-based strength across both, which is a positive signal for the health and momentum of our business.

As I have said, in the past, I'm particularly encouraged by the growth in the number of advertisers because they are essentially the fuel for our future growth.

X-tac growth profit, reached, 172.1 million representing 15.1% year-over-year growth. This included a 45 basis, point Tailwind, from foreign exchange rates,

Growth was primarily driven by higher advertising spend margin expansion on certain digital Publishers and strong contributions from taboola news and bidded Supply. The growth rate also benefited from a favorable comparison to last year, due to the onboarding of Yahoo advertisers

Steve Walker: As mentioned last quarter, gross profit also benefited from reductions in our other cost of revenues driven by lower server and network infrastructure costs, some of which came from a reduction in depreciation expenses related to our servers due to a reassessment of their usefulness. Our net loss was $4.3 million, with non-GAAP net income coming in positive at $30.2 million. Adjusted EBITDA for the quarter was $45.2 million, reflecting 21.3% year-over-year growth. Our adjusted EBITDA margin was 26.2%, which improved by 130 basis points versus Q2 2024. This improvement reflects our healthy year-over-year ex-tech growth, along with strong cost discipline that we exercised in 2024 and the first half of 2025. In terms of cash generation, we had $47.4 million in operating cash flow in the second quarter and free cash flow of $34.2 million, which is over 30% higher than the same quarter last year.

Stephen Walker: As mentioned last quarter, gross profit also benefited from reductions in our other cost of revenues driven by lower server and network infrastructure costs, some of which came from a reduction in depreciation expenses related to our servers due to a reassessment of their useful. Our net loss was $4.3 million, with non-GAAP net income coming in positive at $30.2 million. Adjusted EBITDA for the quarter was $45.2 million, reflecting 21.3% year-over-year growth. Our adjusted EBITDA margin was 26.2%, which improved by 130 basis points versus Q2 2024. This improvement reflects our healthy year-over-year Ex-TAC growth, along with strong cost discipline that we exercised in 2024 and H1 2025. In terms of cash generation, we had $47.4 million in operating cash flow in Q2 and free cash flow of $34.2 million, which is over 30% higher than the same quarter last year.

Gross profit for the quarter. Was 135.6 Million primarily benefiting from strong xstack. Gross profit growth.

As mentioned last quarter, gross profit also benefited from reductions in our other cost of revenues driven by lower server and network infrastructure costs. Some of which came from a reduction in depreciation expenses related to our servers, due to a reassessment of their useful.

Our net loss was 4.3 million with non-gaap net income. Coming in positive at 30.2 million.

Adjusted eval for the quarter was 45.2, Million reflecting 21.3% year-over-year growth. Our adjusted e b margin was 26.2% which improved by 130 basis points versus Q2 20224 this Improvement. Reflects our Healthy year-over-year x-tac Growth along with strong cost discipline that we exercised in 2024 and the first half of 2025.

Steve Walker: Our free cash flow benefited significantly from a couple of factors, primarily higher adjusted EBITDA margins and strong management of our working capital. Our free cash flow conversion from adjusted EBITDA has been over 70% over the last four and the last eight quarters, which we are very happy about. Looking forward, while we continue to expect to convert free cash flow from adjusted EBITDA at a 50% to 60% rate over any typical trailing eight-quarter period, I would expect to remain at the higher end of that range. Turning to the balance sheet, we remain in a strong financial position. We ended the second quarter with a net cash balance of $27.2 million. Cash and cash equivalents totaled $115.2 million, which more than offset our long-term debt of $88 million.

Stephen Walker: Our free cash flow benefited significantly from a couple of factors, primarily higher adjusted EBITDA margins and strong management of our working capital. Our free cash flow conversion from adjusted EBITDA has been over 70% over the last 4 and the last 8 quarters, which we are very happy about. Looking forward, while we continue to expect to convert free cash flow from adjusted EBITDA at a 50% to 60% rate over any typical trailing 8-quarter period, I would expect to remain at the higher end of that range. Turning to the balance sheet, we remain in a strong financial position. We ended Q2 with a net cash balance of $27.2 million. Cash and cash equivalents totaled $115.2 million, which more than offset our long-term debt of $88 million.

In terms of cash generation, we had 47.4 million in operating cash flow in the second quarter and free cash flow of 34.2 million which is over 30% higher than the same quarter last year.

our free cash flow benefited significantly from a couple of factors, primarily higher adjusted, eida margins and strong management of our working capital

Our free cash flow conversion from adjusted. EA has been over 70% over the last 4, and the last 8 quarters, which we are very happy about looking forward. While we continue to expect to convert free, cash flow from adjusted, EA at a 50% to 60% rate over any typical trailing 8 quarter period, I would expect to remain at the higher end of that range.

2 million.

Steve Walker: As a reminder, earlier this year, we secured a new $270 million revolving credit facility, allowing us to fully repay our prior long-term loan while maintaining over $180 million in available capacity as of June 30. This facility also allowed us to reduce our interest expense by $1.2 million in the second quarter. With this facility, we can operate with a lower cash balance while preserving access to significant liquidity. Regarding share repurchases, we continue to believe share repurchases are one of the most compelling uses of capital. In the second quarter, we repurchased approximately 32 million shares at an average price of $3.13 for a total consideration of $100.1 million. Through July, we've repurchased an additional 3.1 million shares at an average price of $3.59 for a total of $11 million.

Stephen Walker: As a reminder, earlier this year, we secured a new $270 million revolving credit facility, allowing us to fully repay our prior long-term loan while maintaining over $180 million in available capacity as of 30 June. This facility also allowed us to reduce our interest expense by $1.2 million in the Q2. With this facility, we can operate with a lower cash balance while preserving access to significant liquidity. Regarding share repurchases, we continue to believe share repurchases are one of the most compelling uses of capital. In the Q2, we repurchased approximately 32 million shares at an average price of $3.13, for a total consideration of $100.1 million. Through July, we've repurchased an additional 3.1 million shares at an average price of $3.59 for a total of $11 million.

Cash and cash equivalents totaled 115.2 million which more than offset? Our long-term debt of 88 million.

As a reminder earlier this year, we secured a new 270 million recall revolving credit facility allowing us to fully repay. Our prior long-term loan while, maintaining over 180 million dollars in available capacity as of June 30th.

This facility also allowed us to reduce our interest expense by 1.2 million in the second quarter.

With this facility, we can operate with a lower cash balance while preserving access to significant liquidity.

Regarding share repurchases. We continue to believe. Share repurchases are 1 of the most compelling uses of capital in the second quarter. We repurchased approximately 32 million shares at an average price of $3.13 for a total consideration of 100.1 million

Steve Walker: In July, our board authorized an incremental $200 million, bringing our total authorization as of August 1 to approximately $285 million. During the first half of the year, as Adam stated, we bought back nearly 12% of our total shares outstanding, shrinking our shares outstanding from about $337 million at the end of 2024 to about $297 million at the end of Q2 2025. Moving to guidance, for the third quarter 2025, we are raising our guidance and expect revenues to be between $461 and $469 million, gross profit to be between $127 and $133 million, ex-tech gross profit to be $166 to $172 million, adjusted EBITDA to range from $43 to $48 million, and non-GAAP net income to be $29 to $34 million. For the full year, we are raising our guidance across the board.

Stephen Walker: In July, our board authorized an incremental $200 million, bringing our total authorization as of 1 August to approximately $285 million. During H1, as Adam stated, we bought back nearly 12% of our total shares outstanding, shrinking our shares outstanding from about 337 million at the end of 2024 to about 297 million at the end of Q2 2025. Moving to guidance. For Q3 2025, we are raising our guidance and expect revenues to be between $461 and $469 million, gross profit to be between $127 and $133 million, Ex-TAC gross profit to be $166 to $172 million, adjusted EBITDA to range from $43 to $48 million, and non-GAAP net income to be $29 to $34 million. For the full year, we are raising our guidance across the board.

Through July, we've repurchased, an additional 3.1 million shares at an average price of $3.59, for a total of 1 million.

In July, our board, authorized an incremental, $200 million bringing our total authorization as of August 1st to approximately 285 million.

during the first half of the year, as Adam stated, we bought back, nearly 12% of our total shares outstanding shrinking, our shares outstanding from about 337 million at the end of 2024 to about 297 million at the end of Q2 2025,

Moving to guidance for the third quarter of 2025, we are raising our guidance and expect revenues to be between 461 and 469 million. Gross profit to be between 127 and 100 133 million,

X-tac gross profit to be 166 to 172 million adjustable, to range from 43 to 48 million, and non-gaap net income, to be, 29 to 34 million.

Steve Walker: We now expect revenues to be between $1.86 and $1.89 billion, gross profit to be between $541 and $555 million, ex-tech gross profit to be $689 to $703 million, adjusted EBITDA to be $208 to $214 million, and non-GAAP net income to be $138 to $144 million. This guidance reflects a strong first half of the year and continued momentum across our business entering the second half. When you are comparing each of the quarters this year to the same quarter last year, you must keep in mind the onboarding of Yahoo, which ramped in the first half of 2024 and impacted quarterly comparisons. As a result, we believe the full-year projected growth rate of 3% to 5%, which normalizes for these dynamics, is the best representation of the true growth of our core business.

Stephen Walker: We now expect revenues to be between $1.86 to 1.89 billion, gross profit to be between $541 to 555 million, Ex-TAC gross profit to be $689 to 703 million, adjusted EBITDA to be $208 to 214 million, and non-GAAP net income to be $138 to 144 million. This guidance reflects a strong H1 of the year and continued momentum across our business entering the H2. When you are comparing each of the Qs this year to the same Q last year, you must keep in mind the onboarding of Yahoo, which ramped in the H1 of 2024 and impacted quarterly comparisons. As a result, we believe the full-year projected growth rate of 3% to 5%, which normalizes for these dynamics, is the best representation of the true growth of our core business.

For the full year, we are raising our guidance across the board. We now expect Revenue to be between 1.86 and 1.89 billion gross profit to be between 541 and 555 million.

Xstack gross profit to be 689 to 773 million adjusted, to be 208 to 214 million, and non-gaap net income, to be 138 to 144 million.

This guidance reflects a strong first half of the year and continued momentum across our business entering. The second half.

When you are comparing each of the quarters this year to the same quarter last year, you must keep in mind, the onboarding of Yahoo which ramped in the first half of 2024 and impacted quarterly comparisons.

Stephen Walker: Investors should anticipate growth rates similar to this year for the time being, as we focus on returning to consistent double-digit growth. In summary, we're pleased to report a strong H1 of the year, with results exceeding the high end of our guidance and giving us the confidence to raise our full-year outlook. With clear momentum across the growth initiatives we outlined at Investor Day and a significant runway ahead, we believe we are well-positioned to continue delivering meaningful value for our shareholders over the long term. With that, let's move to Q&A. Operator, can you please open the lines for questions?

Steve Walker: Investors should anticipate growth rates similar to this year for the time being as we focus on returning to consistent double-digit growth. In summary, we're pleased to report a strong first half of the year with results exceeding the high end of our guidance and giving us the confidence to raise our full-year outlook. With clear momentum across the growth initiatives we outlined at investor day and a significant runway ahead, we believe we are well positioned to continue delivering meaningful value for our shareholders over the long term. And with that, let's move to Q&A. Operator, can you please open the lines for questions?

As a result, We Believe the full year projected growth rate of 3 to 5% which normalizes for these Dynamics is the best representation of the true growth of our Core Business investors should anticipate growth rates similar to this year, for the time being as we focus on returning to consistent double-digit growth.

Operator: Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again. Please stand by while we compile the Q&A roster. First question comes from the line of Jason Helfstein with Oppenheimer. Please go ahead. Your line is open.

Jessica Kourakos: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. First question comes from the line of Jason Helfstein with Oppenheimer. Please go ahead. Your line is open.

In summary, we're pleased to report a strong first half of the year with results exceeding. The high end of our guidance and giving us the confidence to raise our full year outlook with clear momentum across the growth initiatives. We outlined at investor day and a significant Runway ahead. We believe we are well positioned to continue delivering meaningful value for our shareholders, over the long term. And with that, let's move to Q&A. Operator, can you please open the lines for questions?

Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press *1, 1 on your telephone and wait for your name to be announced.

To withdraw your question. Please press star 1 1 again.

Please stand by while we compile the Q&A roster.

Jason Helfstein: Thanks for taking the question. Good morning. I guess literally just right at kind of going on to what you just talked about. What's the roadmap from here to get back to double digits from the current 3% to 5%? How much of that is investing more in sales, better sales, ad tech? Just take us through how do you get back to double digits. Thank you.

Jason Helfstein: Thanks for taking the question. Good morning. So I guess literally just right at that, kind of going on to what you just talked about. So what's the roadmap from here to get back to double digits from the current 3% to 5%? How much of that is, you know, investing more in sales, better sales, you know, ad tech? Just, you know, take us through how to get back to double digit. Thank you.

First question comes from the line of Jason hollstein with Oppenheimer. Please go ahead. Your line is open

Thanks for taking the question. Good morning. So I guess literally just

Um, you know adtech um you know take us through. How do you get back to double digit? Thank you.

Stephen Walker: Thanks, Jason. How are you doing? I think in terms of looking like, how do we get back to double-digit growth, I think first of all, let me talk about how to think about our business right now. We obviously don't want to guide to next year or anything like that. Having said that, the best way to look at our forward-looking growth rates is to look at our full-year guide now, which is 3% to 5%. That guide doesn't include Realize. Obviously, the path back to double-digit growth is for Realize to start to allow us to win more budgets from social, win more budgets from display, basically to expand into that much larger TAM that we talked about at our investor day. That is the primary thing that needs to happen to get back to double-digit growth.

Steve Walker: Thanks, Jason. How are you doing? So I think in terms of looking like, how do we get back to double-digit growth? I think, first of all, let me talk about how to think about our business right now. So we obviously don't want to guide to next year or anything like that. But having said that, the best way to look at our forward-looking growth rates is to look at our full-year guide now, which is 3% to 5%. That guide doesn't include Relive. And obviously, the path back to double-digit growth is for Relive to start to allow us to win more budgets from social, win more budgets from display, basically to expand into that much larger TAM that we talked about at our investor day. That is the primary thing that needs to happen to get back to double-digit growth.

Thanks Jason, how are you doing? Um,

Steve Walker: For now, we're not baking it into our guide for the rest of this year. And, you know, I think the way to think about our business is that 3% to 5% growth, but we think Relive can get us back to double-digit growth.

Stephen Walker: For now, we're not baking it into our guide for the rest of this year. I think the way to think about our business is that 3% to 5% growth. We think Realize can get us back to double-digit growth.

Jason Helfstein: And then just a quick follow-up. So obviously, performance marketing has gotten increasingly competitive. Just ecstatic for a lot of reasons. Just maybe talk about why you think you like the product fits the need of marketers right now. Thank you.

Jason Helfstein: Just a quick follow-up. Obviously, performance marketing has gotten increasingly competitive, just Ex-TAC for a lot of reasons. Just maybe talk about why you think the product fits the need of marketers right now. Thank you.

So, I think in terms of looking like, how do we get back to double digit growth? I, I think first of all, let me talk about how to think about our business right now, so we obviously don't want to guide to next year or anything like that. But having said that, uh, the best way to look at our forward-looking growth rates is to look at our full year guide, now, which is 3 to 5% that guy doesn't include realize, uh, and obviously the path back to double digit growth is for realized to start to allow us to win, more budgets from social win, more budgets from display. Uh basically to expand into that much larger Tam that we talked about at our investor day. That is the primary thing that needs to happen to get back to double digit growth for now, we're not baking it into our guide for the rest of this year. And, and, you know, I think the the way to think about our business is is that 3 to 5% growth, but we think realizing can get us back to double digit growth.

Adam Singolda: Yeah, I can get this one. So in general, I think with Relive, the first thing we did is we made it very easy for advertisers, big and small, to work with us. So we're no longer asking them, you know, for a specialized type of workflow. They can import their social formats. They can import their display formats. It's very much like a Google Ad Manager whereby they give us their goal. You know, we advise them using AI what budget they should use. And from that point on, we, you know, we take it across all of our different types of supply.

Adam Singolda: Yeah, I can get this one. In general, I think with Realize, the first thing we did is we made it very easy for advertisers big and small to work with us. We're no longer asking them for a specialized type of workflow. They can import their social formats. They can import their display formats. It's very much like a Google Ad Manager, whereby they give us their goal. We advise them using AI what budget they should use. From that point on, we take it across all of our different types of supply. I think because Taboola has such a huge distribution with incredible partners such as Yahoo.

And then just a quick follow-up. So obviously Performance Marketing has gotten increasingly competitive. Um, it just it it for for a lot of reason just maybe talk about why you think like the product fits the need of marketers right now. Thank you. Yeah, I I I I can get this 1. So in general, I think with realize we the

Adam Singolda: And I think because Taboola has such a huge distribution with incredible partners such as Yahoo and Apple and Microsoft and, you know, Disney and NBC, USA Today, local sites, sports sites, we have reached to consumers such that we, you know, we get to see outside of Google and Meta, we see people on a consistent basis, probably more than anyone in the open web. And then alongside our investment in AI, which is now very significant, we're very good at looking for conversions quickly for advertisers. And then from there, we grow the budget. I spoke about, you know, earlier on my remarks about a few case studies out of hundreds of advertisers that have tested Relive. And we're seeing exactly the type of dynamics you want to see.

Adam Singolda: Apple, Microsoft, Disney, NBC, USA Today, local sites, and sports sites, we have reached to consumers such that we get to see outside of Google and Meta, we see people on a consistent basis, probably more than anyone, in the open web. Alongside our investment in AI, which is now very significant, we're very good at looking for conversions quickly for advertisers and then from there grow their budget. I spoke about in earlier on my remarks about a few case studies out of hundreds of advertisers that have tested Realize, and we're seeing exactly the type of dynamics you want to see. One, we're working with new advertisers that beforehand did not work with Taboola because of us being specialized and focused on native.

First thing we did is we made it very easy for advertisers big and small to work with us. So we're no longer asking them, you know, for specialized type of of workflow that can import their social uh, formats. They can import or display formats. Give us. It's it's very much like a Google ad manager whereby, they give us their goal. Um, you know, we we advise them using AI what budget they should use. And from that point on we, you know, we take it, um, across all of our different types of supply. And I think, because I had such a huge distribution with Incredible Partners, such as Yao and apple and Microsoft, and you know, Disney and NBC. You said today, local sites, Sports sites. We have reached to consumers such that we, you know, we get to see outside of Google and meta. We see people on a consistent basis, probably more than anyone, um, in the open web and then alongside our investment in AI, which is now very significant. We're very good at looking for conversions, quickly for advertisers. Um, and then, from there grow the budget, I spoke about, um, you know, earlier on my remarks about a few case studies, out of hundreds of advertisers

Adam Singolda: One, we're working with new advertisers that beforehand did not work with Taboola because of us being specialized and focused on native. Now that we make it easier for people to try us out, we're seeing new advertisers that are trying Relive and are succeeding. And the second thing we're seeing is growth in budgets. And like Steve had mentioned, that is the main focus for the company, to get more advertisers to work with us and to get budgets to go, you know, up and right. So I think we're best positioned outside of, you know, Meta and Google to find conversions for advertisers because it's easy. We have the distribution. We have the data and AI to make it work.

Adam Singolda: Now that we make it easier for people to try us out, we're seeing new advertisers that are trying Realize and are succeeding. The second thing we're seeing is growth in budgets. Like Stephen mentioned, that is the main focus for the company, to get more advertisers to work with us and to get budgets to go up and right. I think we're best positioned outside of Meta and Google to find conversions for advertisers because it's easy. We have the distribution, we have the data and AI to make it work.

That have tested realized and we're seeing exactly the type of Dynamics. You want to see um 1 we're get working with new advertisers that beforehand did not work with taboola because of, you know, us being specialized and focused on Native now that we make it easier for people to try us out. We're seeing new advertisers um, that are trying to realize and are succeeding. And the second thing we're seeing is growth in budgets. And like, David mentioned that is the main focus for the company to get more advertisers to work with us and to get budgets to go.

Jason Helfstein: Thanks.

So, you know, up and right, so I think we're best positioned outside of, you know, meta and Google to, uh, find conversions for advertisers because it's easy. We have the distribution, we have the data and AI to make it work.

Jason Helfstein: Thanks.

Operator: Thank you. One moment for our next question. The next question comes from the line of Laura Martin with Needham & Company. Go ahead, your line is open.

Jessica Kourakos: Thank you. One moment for our next question. The next question comes from the line of Laura Martin with Needham & Company. Go ahead. Your line is open.

Thanks.

Thank you. 1 moment for our next question.

Laura Martin: Hey, I want to follow up on this answer you just gave to Jason's question. I would have said that this 2% increase in budget is disappointing because I agree with what you just said, that increasing budgets from existing clients is the whole purpose behind Realize, to try to get some of those native clients' display budgets. While the 9% increase in scale clients is really impressive, the 2% is really disappointing, and I do think that's our primary focus. Why isn't that growth higher for existing clients, do you think?

Laura Martin: Hey, and I want to follow up on this answer you just gave to Jason's question. I would have said that this 2% increase in budgets is disappointing because I agree with what you just said, that increasing budgets from existing clients is the whole purpose behind Relive, to try to get some of those native clients' display budgets. So while the 9% increase in scale clients is really impressive, the 2% is really disappointing. And I do think that's our primary focus. So why isn't that growth higher for existing clients, do you think?

The next question comes from the line of Laura Martin with nem and Company. Go ahead. Your line is open

Hey, and I want to follow up on this answer, you just gave to Jason's question. I would have said that this 2% increase in budgets is disappointing because I agree with what you just said that increasing budgets from existing. Clients is the whole purpose behind realized to try to get some of those native. Um, clients display budgets.

Stephen Walker: Yeah. Hi, Laura. I think that's a good question, and I think thanks for prompting on it because it's important for us to talk about that. I think we have a good slide in our backup deck that's on our investors.taboola.com that you can take a look at. What you see there is that the number of scaled advertisers continues to grow, and you see kind of a nice up and to the right trend. The average revenue per scaled advertiser has been kind of in that similar range for probably seven or eight quarters now. The reason for that is the existing advertisers that we do have that have already been in that scaled category are growing. They're growing year over year, and that is the growth.

Steve Walker: Yeah. Hi, Laura. So I think that's a good question. And I think it's, thanks for prompting on it because it's important for us to talk about that. I think we have a good slide in our backup deck that's on our investors.taboola.com that you can take a look at. What you see there is that the number of scaled advertisers continues to grow, and you see kind of a nice up into the right trend. The average revenue per scaled advertiser has been kind of in that similar range for probably seven or eight quarters now. But the reason for that is the existing advertisers that we do have that have already been in that scaled category are growing. They're growing year over year, and that is the growth.

So while the 9% increase in in scale, clients is really impressive. The 2% is really disappointing and I do think that's our primary focus, so why isn't that growth higher for existing clients? Do you think?

Yeah. Hi Laura. So I think that's a good question. And I think it's uh it's uh thanks for prompting on it because it's important for us to talk about that. I think we have a good slide in in our uh, our backup deck that's on our investors. Uh, tula.com that you can take a look at what you see there is that uh the number of scaled advertisers continue to grow and you see kind of a nice up into the right Trend. The average revenue per scaled Advertiser has been kind of in that too.

Steve Walker: But as we bring on new advertisers, they tend to start at the lower end of that range, and then they kind of grow over time. So they bring down the average somewhat. So it basically, it's just because of the fact that we continue to grow that number of scaled advertisers that brings down the overall average.

Stephen Walker: As we bring on new advertisers, they tend to start at the lower end of that range, and then they kind of grow over time. They bring down the average somewhat. Basically, it's just because of the fact that we continue to grow that number of scaled advertisers that brings down the overall average.

Laura Martin: This isn't a same-store number. You're not looking at the prior year scaled advertiser.

Laura Martin: So this isn't the same store number. You're not looking at the prior year's scaled advertiser.

It's just because the the fact that we continue to grow that number of scaled advertisers, that brings down the overall average.

Stephen Walker: Correct

Steve Walker: Correct.

Laura Martin: holding it constant and look at theirs. You're allowing the new ones to lower the average. Oh.

Laura Martin: Holding it constant and look at theirs. You're allowing the new ones to lower the average. Oh.

So, this isn't the same store number. You're not looking at the prior year. Scaled Advertiser correct. Holding it constant.

and allowing the

Stephen Walker: That's correct. It's not a same store. By the way, that is a very interesting observation and maybe something that we'll look at in the future, giving some indication of more same store.

Steve Walker: That's correct. So it's not a same store. But by the way, that is a very interesting observation and maybe something that we'll look at in the future, giving some indication of more same store.

Laura Martin: Yeah, I think that would be the more interesting number if it's growing faster than 2%, because 2%, if that's your primary focus, does not look very impressive.

Laura Martin: Yeah, I think that would be the better, the more interesting number if it's growing faster than 2% because 2%, if that's your primary focus, does not look very impressive. But anyway, and then Adam, for you, open web. So, you know, sort of an increasing number of people are saying the open web is dead, in part because the Google search, moving to Google Answers and sort of ChatGPT, answering questions rather than sending links, really does threaten sort of the open web writ large. And I understood your point that you have the best, like, biggest brand clients. But I mean, even if a biggest brand client has 30% of its traffic coming from search, that's about to go to zero in theory over the next five years. So they don't really sound very immune.

news to lower the average. Oh, that's correct. So it's not the same store but by the way that is a very interesting observation and maybe something that we'll look at in the future and giving some indication of more same store.

Stephen Walker: Right. Yeah.

Laura Martin: Anyway. Adam, for you, open web. Sort of an increasing number of people are saying the open web is dead. In part because this Google search, moving to Google Answers and sort of ChatGPT answering questions rather than sending links, really does threaten the open web writ large. I understood your point that you have the best biggest brand clients, but even if a biggest brand client has 30% of its traffic coming from search, that's about to go to zero in theory over the next five years. They don't really sound very immune. More importantly, I'd like you to discuss the whole notion of does the open internet survive the change in generative AI search behavior?

2%. If that's your primary focus does not look very impressive. But anyway and then Adam for you open web.

An increased.

Laura Martin: But more importantly, I'd like you to discuss the whole notion of does the open internet survive the change in generative AI search behavior?

Adam Singolda: Yeah. Hey, Laura, good morning. I think that's a great question. A few things, just starting with some stats, then we can go into where I think it's going. Overall, for us as a company, we have seen a minimal impact to date from LLM-driven search changes. I spoke about 5% of our US traffic as of now comes from search, and that's primarily because we have two types of publishers, one that are very big, and are known brands who have a lot of direct traffic. For them, search is 30%, 40%. We have big platforms such as Microsoft, Yahoo, Apple, and others. They don't get any search traffic. They're fairly, or very little. For that reason, as a company, we have about 5% comes from search, Google search specifically, and the decline we've seen is at the mid-single digits.

Adam Singolda: Yeah, yeah. Hey, Laura, good morning. I think that that's a great question. So a few things, just starting with some stats, and then we can go into where I think it's going. So overall, you know, for us as a company, you know, we have seen a minimal impact today from, you know, LLM-driven search changes. You know, I spoke about about 5% of our US traffic as of now comes from search, and that's primarily because we have two types of publishers, one that are very big and are known brands who have a lot of direct traffic. So for them, search is 30%, 40%. And then we have sort of like big platforms such as Microsoft, Yahoo, Apple, and others. They don't get any search traffic. They're fairly or very little.

Number of people are saying the open web is dead in part, because this Google Search moving to Google answers and sort of chat GPT answering questions rather than sending links. Really does. Threaten sort of the open web at large and I understood your point that you have the best like, biggest brand clients. But I mean, people have the biggest brand client has 30% of its search. It traffic coming from search. That's about to go to zero in theory over the next 5 years so they don't really sound, very immune. But more importantly, I'd like you to discuss the whole notion of does the open internet survive. Um, the change in generative AI search Behavior,

Adam Singolda: So for that reason, as a company, you know, we have about 5% comes from search, Google search specifically. And the decline we've seen is at the, you know, mid-single digit. So as of now, it's not material. To me, in fact, that was the meeting I had before coming here today. I think where it's going is very exciting to me. I think that while search traffic may go down and will reduce page views to publishers from that perspective, there is a new kind of birth of new types of traffic that will go up, and that is LLM on publisher sites. And I think if you may have seen it, we now have a deeper dive, and I spoke about that.

Adam Singolda: As of now, it's not material. To me, in fact, that was the meeting I had before coming here today, I think where it's going is very exciting to me. I think that while search traffic may go down and will reduce page views to publishers from that perspective, there is a new kind of birth of new type of traffic that will go up, and that is LLM on publisher sites. I think if you may have seen us bring our deeper dive, and I spoke about that, but to me, publishers for the first time that have trust with consumers could capitalize on offering LLM to consumers and create a new touch point and a new interaction with consumers that may be worth a lot more than the search traffic they lose.

Yeah. Hey hello. Good morning. I think that that's a great question. So so a few things just starting with some stats and then we can go into where I think it's going. So overall, you know, for us as a company, you know, we have seen a minimum impact, uh, to date from, you know, llm driven search changes. Um, you know, I I I spoke about, uh, about 5% of our us traffic as of now comes from search and that's primarily because we have 2 types of Publishers 1 that are very big, um, and are known Brands who have a lot of direct traffic. So for them, search is 30 40%. And then we have sort of like, big platforms. Such as Microsoft Yahoo apple and others. They don't get any search traffic, they're fairly or very little. So, for that reason, it's a company. You know, we have about 5% comes from search Google search specifically, and the decline we've seen is in the, you know, mid single digits. So, as of now, it's not material to me in. In fact, that was the meaning I had before I come in here today, I I think where it's going is, is that it's very exciting to me. I think that was search traffic. May go down and we will reduce page views to Publishers on

That perspective.

Adam Singolda: But to me, publishers, for the first time, that have trust with consumers could capitalize on offering LLM to consumers and create a new touchpoint and a new interaction with consumers that may be worth a lot more than the search traffic they lose. So if I'm a financial publisher or a sports publisher or a local site or a national site with a travel section, someone talking on my site about the travel they may take or mortgage they're considering taking using LLM, which is a behavior they're used to on ChatGPT, will be worth a fortune, in my opinion. So I just, I can tell you, I just booked a trip with my family in August. I started on ChatGPT.

Adam Singolda: If I'm a financial publisher or a sports publisher or a local site or a national site with a travel section, someone talking with on my site about the travel they may take or mortgage they're considering taking using LLM, which is a behavior they're used to on ChatGPT, will be worth a fortune, in my opinion. I can tell you, I just booked a trip with my family in August. I started on ChatGPT. I spent 30 seconds there, but then I spent 30 minutes across the web looking for reviews and images because I didn't want my wife to be upset that I'm taking her to a bad place. I think the consumer behavior is that you start with some engines, but you then spend a lot of time reviewing, reading, getting curious, and educated before you make a decision.

There is a new kind of birth of new type of traffic that will go up and that is llm on publisher sites. And I think if, you know, if you, you may have sent 3 hours to deeper dive and and I spoke about that. But to me Publishers for the first time that have trust with consumers, could capitalize on offering llm to Consumers and create a new touch point and a new interaction with consumers that may be worth a lot more than the search traffic, they lose. So if I'm a financial publisher or a sports person,

Adam Singolda: I spent 30 minutes, 30 seconds there, but I spent 30 minutes across the web looking for reviews and images because I didn't want my wife to be upset that I'm taking her to a bad place. So I think the consumer behavior is that you start with some, you know, engines, but you then spend a lot of time reviewing, reading, getting curious and educated before you make a decision. And that's where the open web shines. So I think that there's a huge opportunity for LLM thriving on the open web in ways that we have not seen yet.

Adam Singolda: That's where the open web shines. I think that there's a huge opportunity for LLM thriving on the open web in ways that we have not seen yet.

Laura Martin: Okay. Super helpful. My last question, which is my third question is, I love the fact you're shrinking the capital base, but why would you spend $100 million buying in shares and not touch the $88 million worth of debt when we don't have an ad tech company other than you guys really that has financial leverage?

Laura Martin: OK, super helpful. And then my last question, which is my third question, is walk me through why you would, I love the fact you're shrinking the capital base, but why would you spend $100 million buying in shares and not touch the $88 million worth of debt when we don't have an ad tech company other than you guys, really, that has financial leverage?

Publisher, or a local site or a national site for the Travel section. Someone talking with on my site about the travel, they may take or mortgage, you're considering taking using llm, which is, which is a behavior. They're used to on jbt, will be worth a fortune, in my opinion. So, I just, I can tell you, I just booked a trip, uh, with my family in August, I started on cgpt, I spent 30 minutes 30 seconds there, but then I spent 30 minutes across the web looking for reviews and images because I didn't want my wife to be upset that I'm taking her to the, a bad place. So, I think the consumer behavior is that you start with some, you know, engines, but you then spend a lot of time, reviewing reading, getting curious and educated before you make a decision. And that's where the open web shines. So, I think that there's a huge opportunity for llm thriving on the open web in ways that we have not seen yet.

Okay, super helpful.

My last question. Um, which is my third question is

Steve Walker: Yeah, no, that's a good question, Laura. So the way we're managing it right now is we're basically using the revolver as our kind of cushion to allow us to keep basically cash neutral, roughly. So you saw we had about $27 million of net cash at the end of last quarter. But throughout the quarter, that fluctuates between, you know, kind of a negative net cash balance of around $30 to $40 million up to a positive cash balance of up to about $50 to $60 million. And we use the revolver to manage that. So the way we're managing is we're managing to roughly cash neutral on an average basis over the course of the quarter, and then using the excess cash flow we have beyond that to buy back shares. So, and we think that's the right way to do it because, A, it's very low risk.

Stephen Walker: Yeah, no, that's a good question, Laura. The way we're managing it right now is we're basically using the revolver as our kind of cushion to allow us to keep basically cash neutral roughly. You saw we had about $27 million of net cash at the end of last quarter. Throughout the quarter, that fluctuates between kind of a negative net cash balance of around $30 to 40 million, up to a positive cash balance of up to about $50 to 60 million. We use the revolver to manage that. The way we're managing is we're managing to roughly cash neutral on a average basis over the course of the quarter. Then, using the excess cash flow we have beyond that to buy back shares. We think that's the right way to do it because, A, it's very low risk.

Walk me through why you would? I love the fact. You're shrinking, the capital base. But why would you spend a 100 million buying in shares? And not touch the 88 million dollars worth of debt when we don't have an ad tech company other than you guys really, that has financial leverage.

Yeah. No that's a that's a good question, Laura. So the way we're managing it right now is we're basically using the revolver as our uh, kind of cushion to to uh, to allow us to keep basically cash neutral roughly. So you saw, we had about 27 million dollars of net cash at the end of last quarter.

Stephen Walker: We, generally speaking, have enough cash to pay off the revolver at any given moment anyway. It's also fairly capital efficient because we're able to swing into negative net cash territory for brief periods using the revolver and continue to be aggressive in our share buyback. That's the way we're managing things. Generally, the other thing I would say is if you do the kind of capital structure math, we should be buying back shares, in our belief, up to a much higher share price. We think it's a good use of cash as well.

Steve Walker: We, generally speaking, have enough cash to pay off the revolver at any given moment anyway. But it's also fairly capital efficient because we're able to swing into negative net cash territory for brief periods using the revolver and continue to be aggressive in our share buyback. So that's the way we're managing things. And generally, the other thing I would say is if you do the kind of capital structure math, we should be buying back shares, in our belief, up to a much higher share price. So we think it's a good use of cash as well.

The excess cash flow. We have beyond that to buy back shares, so and we think that's the right way to do it because a, it's very low risk. We, we generally speaking have enough cash to pay off the revolver at any given moment. Anyway, uh, but it's also fairly Capital efficient because we're able to swing into negative net cash territory for brief periods. Using the revolver and continue to be aggressive in our share buyback. Uh, so that's that's the way we're managing things and generally the other thing I would say, is, if you do the kind of capital structure, math,

Laura Martin: Thank you.

Uh we should be buying back shares uh in our belief up to a much higher share price. So we think it's a good use of cash as well.

Steve Walker: Thanks, Laura.

Stephen Walker: Thanks, Laura.

Operator: Thank you. One moment for our next question. The next question comes from the line of Matthew Condon with Citizens. Please go ahead. Your line is open.

Thank you.

Jessica Kourakos: Thank you. One moment for our next question. The next question comes from the line of Matt Condon with Citizens. Please go ahead. Your line is open.

Thanks Laura.

Thank you. 1 moment for our next question.

Matthew Condon: Thank you so much for taking my questions. My first one is just on Realize. Can you just walk through again what are the potential gating factors as far as that ramping here at the end of 2025, maybe into 2026? Is it a function of just getting into annual budgeting and breaking in there? Can you just talk about just how we should think about the ramp into 2026?

Matt Condon: Thank you so much for taking my questions. My first one is just on Relive. Can you just walk through again, what are the potential gating factors as far as that ramping here at the end of '25 and maybe into '26? Is it a function of just getting into annual budgeting and breaking in there? Can you just talk about just how we should think about the ramp into 2026?

The next question comes from the line of Matt condom with citizens. Please go ahead. Your line is open.

Adam Singolda: Yeah. I can start. The biggest thing is, as you know from Realize, the biggest opportunity for us is that we're tapping into a much bigger market of essentially performance budget. If you think about advertisers, the way they think about their future is, I think now more than ever, performance advertising is becoming the key part that advertisers want to make sure they're good at and they're diversified, outside of search and social. In a world that's a bit volatile and things are changing, the first thing the advertisers stop is brand dollars. The last thing they stop is their kind of oxygen line, which is the performance advertising budget. With Realize, we're tapping into two types of parts of that market. The first one is display advertising budget, which is highly fragmented.

Adam Singolda: Yeah, I can start. So the biggest thing is, you know, as you know from Relive, the biggest opportunity for us is that we're tapping into a much bigger market of essentially performance budgets. So if you think about advertisers, the way they think about the future is, I think now more than ever, performance advertising is becoming the key part that advertisers want to make sure they're good at and they're diversified, you know, outside of search and social. In a world that's a bit, you know, volatile and things are changing, the first thing advertisers stop is brand dollars. And the last thing they stop is their kind of, you know, oxygen line, which is the performance advertising budget. And with Relive, we're tapping into two types of kind of parts of that market. The first one is display advertising budgets, which is highly fragmented.

Thank you so much for taking my questions. My first 1 is just on realized. Can you just walk through again? What are the potential dating factors? As far as that ramping here at the end of 25? Maybe into 26, is it, is it a function of just getting into annual budgeting and, and breaking in there? Can you just talk about just how we should think about the ramp at the 2026?

Adam Singolda: So here, Relive needs to essentially be better than alternative ad tech platforms that are getting, we estimate, to be more than $10 billion a year. Many, many, many small companies that are getting, you know, a piece of that pie. And we think Taboola has a significant, you know, advantage because of our first-party data, because of our AI and distribution to allow us to take a piece of that sort of $10 billion display budget. That's part of it. And the second thing is that advertisers tell us that when they spend money on social at large, they're seeing some diminishing return at the tail of their spend. So if you look at kind of like their conversion rates over time, it starts well on social platforms, and then they get to kind of their goal.

Stephen Walker: Here, Realize needs to essentially be better than alternative ad tech platforms that are getting, we estimate, to be more than $10 billion a year. Many small companies are getting a piece of that pie, and we think Taboola has a significant advantage because of our first-party data, because of our AI and distribution, to allow us to take a piece of that sort of $10 billion display budget. That's part of it. The second thing is that advertisers tell us that when they spend money on social at large, they're seeing some diminishing return at the tail of the-

Yep. Um, I, I can start. So the biggest thing is, um, you know, as as, you know, from real life, the biggest opportunity for us is that we're tapping into a much bigger Market of essentially performance budgets. So, if you're thinking about advertisers, the way they think about the the future, and I think now more than ever performance advertising is becoming the key part that advertisers want to make sure they're, they're good at that. And they're Diversified, um, you know, it's out of structure and social in the world. That's a bit, you know, volatile and things are changing. The first thing we advertise to stop is brand dollars and the the, the last thing they they stop is their kind of, you know, oxygen line which is the performance advertising budget and we realize we're tapping into 2 types of kind of parts of that market. The first 1 is display advertising budgets, which is highly fragmented. So here realize it needs to essentially be better than alternative ethics platforms that are getting we estimate to be more than 10 billion dollars a year. Many many, many small companies that are getting um you know a piece of that pie and we're saying to Google as a significant, you know, advantage.

Adam Singolda: spend. If you look at your conversion rates over time, it starts well on social platforms, and then they get to their goal, and at the end of that campaign, a lot of times it's too expensive. They would love to give us 10%, 50% of their social spend and see if we can drive similar performance. With Realize, we're hard at work going after those two buckets. I think the first one, the display one, we're seeing a lot of traction, because again, it's highly fragmented, and I think we have an advantage there, and social will be longer term for us. That's how I see us doubling and tripling Taboola's revenue, in years to come, taking advantage again, of our first-party data and technology.

Adam Singolda: And then at the end of that campaign, a lot of times it's too expensive. So they would love to give us 10%, 50% of their social spend and see if we can drive similar performance. So with Relive, we're hard at work going after those two buckets. I think the first one, the display one, we're seeing kind of a lot of traction because, again, it's highly fragmented. And I think we have an advantage there, and social will be longer term for us. But that's how I see us doubling and tripling Taboola's revenue in years to come, taking advantage again of our first-party data and technology.

Advantage, because of our first party data because of our Ai and distribution, to allow us to take a piece of that sort of 10 billion display budgets, that's part of it. And the second thing is that, advertisers, tell us that when they spend money on social at large, they're seeing some diminishing return, a detail of their spend. So, if you look at kind of like your conversion rates over time, it starts well on social platforms and then they get to kind of like their goal. And then at the end of that campaign, a lot of times it's too expensive so they would love to give us a chance.

% of their social spend and see if they we can drive similar performance. So we realize we're hard at work going after those 2 buckets. I think the first 1 the display 1. We're seeing kind of a lot of traction because again it's highly fragmented and I think we have an advantage there and social will be longer term for us. Um but that that's how it's just doubling and tripling tools Revenue uh in yours to come.

Adam Singolda: And, you know, I'm happy that we, you know, were conservative in the way we think about the business to give our team an opportunity to work hard, keep innovating, learning from the market, and essentially see budget growth, which will drive the company's growth over time.

Adam Singolda: I'm happy that we're conservative in the way we think about the business to give our team an opportunity to work hard, keep innovating and learning from the market, and essentially see budget growth, which will drive the company's growth over time.

Matthew Condon: Great. That's very helpful. My second one's just on the growth scale of advertisers. Can you just talk about what were the drivers there? Was it just better budgets out of existing clients because of improved macro environment or were there new customer acquisitions? Can you just talk about what was the driver there?

Matt Condon: Great. That's very helpful. And then my second one is just on the growth of scaled advertisers. Can you just talk about what were the drivers there? Was it just better budgets out of existing clients because of the improved macro environment? Were there new customer acquisitions? Can you just talk about what was the driver there?

Invent is again of a of our first part of data and technology. And you know I'm happy that we you know we're conservative in the way we think about the business to give our team an opportunity to work hard. Uh keep innovating learning from the market and essentially see budget growth, which will drive the company's growth over time.

Steve Walker: Yeah, so I think, you know, if you look at the two numbers, the number of scaled advertisers grew about 9%, and the average revenue per scaled advertiser grew about 2%. The number of scaled advertisers has been consistently growing for us over the last few years. And that, frankly, is just, you know, good sales effort from our sales teams bringing on new customers and then working to grow them over time. I think, you know, it kind of speaks to our advantage as a performance advertising platform, the fact that we are able to show that performance to the advertisers and get them to scale with us. That's why we've been able to grow the number of scaled advertisers over time.

Stephen Walker: Yeah. I think, if you look at the two numbers, the number of scaled advertisers grew about 9%, and the average revenue per scaled advertiser grew about 2%. The number of scaled advertiser has been consistently growing for us over the last few years, and that frankly is just good sales effort from our sales teams, bringing on new customers and then working to grow them over time. I think, it speaks to our advantage as a performance advertising platform, the fact that we are able to show that performance to the advertisers and get them to scale with us. That's why we've been able to grow the number of scaled advertisers over time.

Great. That's that's very helpful and then my second 1 is just on the growth scale of advertisers, can you just talk about what we were the drivers there was it just just better budgets out of existing clients because of improved macro environment or with their new customer Acquisitions. Can you just can you just talk about with the driver there?

Yeah, so I think, uh, you know, if you look at the 2 numbers, the uh number of scaled advertisers grew about 9% and the uh, average revenue per scaled Advertiser grew about 2%. Um, the the number of scaled Advertiser has been consistently growing for us over the last few years. And that frankly is just, uh, you know, good sales effort from our sales teams bringing on new customers and then working to grow them over time. I think, you know, it kind of speaks to our advantage

Steve Walker: And as I said to Laura earlier, you know, I think generally what I want to see for now is that the average revenue per scaled advertiser kind of stays in that relative range that it's been right now and doesn't shrink per se. But as long.That

Stephen Walker: As I said to Laura earlier, I think generally what I want to see for now is that the average revenue per scaled advertiser kind of stays in that relative range that it's been right now, and doesn't shrink per se. As long as it's staying in that range, I think being able to grow the number of scaled advertiser is really important because that, as I've said in my prepared remarks and in past quarters, that's the fuel for future growth because now we can work to grow those advertisers even more over time.

Steve Walker: staying in that range, I think being able to grow the number of scaled advertisers is really important because that, as I've said in my prepared remarks and in past quarters, that's the fuel for future growth because now we can work to grow those advertisers even more over time.

Matthew Condon: Thank you so much.

Jessica Kourakos: Thank you so much.

In past quarters. That's the fuel for future growth because now we can work to grow those advertisers even more over time,

Operator: Thank you. One moment for our next question. Next question comes from the line of Zach Cummins with B. Riley Securities. Go ahead, your line is open.

Adam Singolda: Thank you. One moment for our next question. Next question comes from the line of Zach Cummins with B Riley Securities. Go ahead, your line is open.

Thank you so much.

Thank you. 1 moment for our next question.

Zach Cummins: Yep. Hi, good morning, Adam and Steve. Congrats on a solid quarter, and thanks for taking my questions. First question, can you give us an update in terms of just the overall tariff environment? I know during your last earnings call, you mentioned kind of a modest headwind out of China with some of your customers and impacts on the advertising spend there. Any sort of update you can give on that front and kind of the assumptions that you're making for H2 of this year?

Jessica Kourakos: Hi, good morning, Adam and Steve. Congrats on the SOLID quarter and thanks for taking my questions. First question, can you give us an update in terms of just the overall tariff environment? I know during your last earnings call, you mentioned kind of a modest headwind out of China with some of your customers and impacts on the advertising spend there. So any sort of update you can give on that front and kind of the assumptions that you're making for the second half of this year?

Next question comes from the line of Zack Cummins with B Riley Securities. Go ahead. Your line is open.

Steve Walker: Yeah, so the simple answer on the assumptions that we're making for the second half of the year is more of the same. And you know, as we said last quarter, we did see a reduction in China spend or China revenue to our business. It's not material. It was less than 1% or right around 1%. And currently, China accounts for about 5% of our revenue. So, you know, so it's not the impact hasn't been huge. But we're assuming that that does not really come back the rest of the year. And in fact, last year, Q4, there you know, China was actually an area of strength for us. So we're not factoring that into the guide for the rest of the year. And so we've taken it into account and assumed kind of more of what we're seeing right now.

Stephen Walker: Yeah. The simple answer on the assumptions that we're making for H2 is more of the same. As we said last quarter, we did see a reduction in China spend or China revenue to our business. It's not material. It was less than 1% or right around 1%. Currently China accounts for about 5% of our revenue, so the impact hasn't been huge. We're assuming that that does not really come back the rest of the year. In fact, last year, Q4, China was actually an area of strength for us, so we're not factoring that into the guide for the rest of the year. We've taken it into account and assumed more of what we're seeing right now.

Yep. Hi, good morning. Adam Steve, congrats on the solid quarter and thanks for making my question. So, first question, uh, can you give us an update in in terms of just the overall tariff environment, I know during your last earnings. So you mentioned kind of a modest set wind out of China with some of your customers and and impacts on the advertising spend there. So any sort of update you can give on that front and and kind of the assumptions that you're making for second half of this year.

Yeah, so this the simple answer on the assumptions that we're making, uh, for the second half of the year is more of the same. Uh, and you know, as we said last quarter, we did see a reduction, uh, in China spend or China Revenue, uh, to our business. It's not Material. It was, it was less than 1% or right around 1%, uh, and currently China accounts for about 5% of our Revenue. So, uh, you know, so it's not the impact hasn't been huge, um, but we're assuming that, that does not really come back, the rest of the year. And in fact, last year a Q4 there, you know, China was actually an area of strength for us. So we're not factoring that into the guide for the rest of the year. Uh and so we've we've taken it in

Steve Walker: By the way, we've seen a very slight recovery in the China revenue, but nothing material at this point, which is why we're not factoring any recovery into our guidance.

Stephen Walker: By the way, we've seen a very slight recovery in the China revenue, but nothing material at this point, which is why we're not factoring any recovery into our guidance.

Zach Cummins: Understood. Nice to see the continued expansion of the share repurchase program. Stephen, any sort of update you can give around approval from Israeli authorities in terms of the 25% holder? Just curious on that front, or just maintaining the existing structure that you have in place right now.

Jessica Kourakos: Understood. And nice to see the continued expansion of the share repurchase program. Steve, any sort of update you can give around kind of approval from Israeli authorities in terms of the 25% holder? Just curious on that front or just maintaining the existing structure that you have in place right now?

Into account and assumed kind of more of what we're seeing right now. By the way, we've seen a very slight recovery in in the China Revenue but nothing material at this point, which is why we're not factoring any recovery into our guidance.

Stephen Walker: Yeah. No, good question. First of all, just to explain to everybody what it is that you're mentioning about the buyback. We just got an additional $200 million of authorization for our buyback. We've got about $285 million of total authorization for our buyback now. We chose to do that during this quarter just to be proactive because Israel has regulations around some hoops you have to jump through in order to get the approval to be able to do buybacks. It takes some time, so we wanted to do that mid-quarter here and get it set up. It's just being proactive. In terms of the approval for not having to buy back shares from Yahoo to the exception from the, or exemption from the 25% rule, unfortunately, I don't have anything specific or any specific update on that currently. We're working on it.

Steve Walker: Yeah, no, good question. So first of all, just to kind of explain to everybody what it is that you're mentioning about the buyback. So we just got an additional $200 million of authorization for our buyback. So we've got about $285 million of total authorization for our buyback now. We chose to do that kind of during this quarter just to be proactive because Israel has regulations around what you have some hoops you have to jump through in order to get the approval to be able to do buybacks. It takes some time. So we wanted to do that kind of mid-quarter here and get it set up. So it's just being proactive.

Understood and and nice to see that the continued expansion of the the share repurchase program. A see any sort of update? You can get around, kind of approval, uh, from Israeli authorities, in terms of the 25% holder, just just curious on that front door. Just maintaining the existing structure that you have in place right now.

Steve Walker: In terms of the approval for not having to buy back shares from Yahoo to the exception from the or exemption from the 25% rule, unfortunately, I don't have anything specific or any specific update on that currently. We're working on it. We'll update you when we have something material to say about it. But unfortunately, I don't even have a timeline at this point.

Stephen Walker: We'll update you when we have something material to say about it, but unfortunately, I don't even have a timeline at this point.

Yeah, no, good question. So first of all, just to kind of explain to everybody what it is that you're mentioning about the buyback. So we just got an additional $200 million of authorization for our buyback. So we've got about 285 million of total authorization for our buyback. Now, we chose to do that kind of during this quarter, just to be proactive because Israel has regulations around what you have some hoops. You have to jump through in order to get the approval to be able to do BuyBacks. It takes some time. So we wanted to do that uh kind of mid-quarter here and and get it set up. So it's just being proactive um in terms of the approval for uh not having to buy back shares from Yahoo to the exception from the or exemption from the 25% rule. Unfortunately, I don't have anything specific or any specific update on that currently. We're working on it. Uh we'll update you when we have

Have something material to say about it, but unfortunately I don't even have a timeline at this point.

Zach Cummins: Understood. Well, thanks for taking my questions and best of luck with the rest of the quarter.

Jessica Kourakos: Understood. Well, thanks for taking my questions and best of luck with the rest of the quarter.

Adam Singolda: Thanks.

Steve Walker: Thanks. Thank you.

Stephen Walker: Thank you.

Operator: Thank you. One moment for our next question. The last question comes from James Kopelman with TD Cowen. Go ahead, your line is open.

Understood. Well, thanks for taking my questions and uh best of luck with the rest of the quarter.

Adam Singolda: Thank you. One moment for our next question. The last question comes from James Kopelman with TD Cohen. Go ahead, your line is open.

Thanks, thank you.

Thank you. 1 moment for our next question.

James Kopelman: Great. Thanks for taking the questions, guys. Congrats on the quarter. I have a couple. First for Adam. I think you mentioned Taboola News growing double digits. Maybe any additional or updated color on how big you see the opportunity at Taboola News over time? Compared to what I think at one point was a historical run rate around $100 million in revenue, what do you see as the near-term opportunities for Taboola News? Should we expect to see a broader rollout of countries and device OEMs, or is future growth being driven primarily by some of the prior metrics, higher engagement yield, et cetera? I have one or two follow-ups.

Steve Walker: Great, thanks for taking the questions, guys. Congrats on the quarter. I have a couple. First, for Adam, I think you mentioned Taboola News going double digits. You know, maybe any additional or updated color on how big you see the opportunity of Taboola News over time compared to what I think at one point was a historical run rate of around $100 million in revenue. What do you see as the near-term opportunities for Taboola News? Should we expect to see a broader rollout of countries and device OEMs? Or is future growth being driven primarily by some of the prior metrics, higher engagement, yield, et cetera? And then I have one or two follow-ups.

The last question comes from James copelan, with TD Cohen go ahead. Your line is open.

Uh, great thanks for taking the questions, guys. Congrats on the corner of a couple.

Uh, first for Adam, um, I think you mentioned, taboola news going, double digits. Um, you know, maybe any additional or updated color on how big you see the opportunity to buy news over time. Compared to what I think at 1 point was a historical run rate of around 100 million in in Revenue, what do you see as the near-term opportunities for tabulis should be expected to see a broader role out of countries and device oems?

Adam Singolda: Sure. Thanks for the question. Good morning. A few things about Taboola News. One, I'll say I like this business a lot. It falls really great within the Realize strategy of having supply that is unique, that converts, and advertisers like. In this case, just as a reminder for people, this is where Taboola is the news experience on devices such as Xiaomi, Samsung, and others, that where they sit either on their lock screen or they have to swipe right to see the newsfeed from all of our publishers. They click on that, and then we're the first thing they do before they open their browser, before they open social network. Taboola is the first experience they have on their device. It's a very special moment on a consumer journey. The Q2 was good.

Jason Helfstein: Sure. Thanks for the question. Good morning. So a few things about Taboola News. One, I'll just I'll say I like this business a lot. It falls, you know, really great within real-life strategy of having supply that is unique, that converts, and advertisers like. So in this case, just as a reminder for people, this is where Taboola is, the news experience on devices such as Xiaomi and Samsung and others, that where they see us either on their lock screen or they have to swipe right to see the news feed from all of our publishers. They click on that, and then we're the first thing they do before they open a browser, before they open a social network. Taboola is the first experience they have on their device. So it's a very special moment on the consumer journey. So the second quarter was good.

Um, or is future growth being driven, primarily by some of the prior metrics, higher engagement, yield Etc. Uh, and then I have 1 or 2. Follow-ups. Sure. Thanks for the question. Good morning. So, a few things about Talent is 1. I'll just, I'll say, I like this business a lot. It's it follows, you know, really great within real life, strategy of having Supply that is unique, that converts and advertisers like, so in this case, just as a reminder for people, this is where taboola is the new, uh, experience on devices such as tyomi and Samsung and others. Um, that where they says, either of the lock screen or they have

Jason Helfstein: You know, it's growing faster than the company, and we're seeing growth in devices and performance and new touchpoints that we're testing with. Without getting into, you know, too much kind of guidance on this, I'll just say we're having good momentum, and we, you know, will continue to invest in this. And again, the main thing we are trying to do is get more devices, more partners around the world that are good for advertisers and can give us more kind of unique supply that we want to get for real life. So overall, like the business, it's growing faster, and it's something that is relevant to real-life strategy.

Adam Singolda: It's growing faster than the company, and we're seeing growth in devices and performance and new touchpoints that we're testing with. Without getting into too much kind of guidance on this, I'll just say is we're having good momentum, and we'll continue to invest in this. Again, the main thing we are trying to do is get more devices, more partners around the world that are good for advertisers and can give us more kind of unique supply that we want to get for Realize. Overall, like the business, it's growing faster, and it's something that is relevant to Realize strategy.

James Kopelman: Great. Just a quick follow-up, I guess either for Adam or for Steve. Just given the ongoing macro uncertainty, what's your sense of conditions in the digital ad market as we head into late summer? What are you hearing from your conversations with clients with regards to ad budgets in the H2? Maybe just remind us again, what's the geographic split of your business, North America versus Europe versus other regions?

Steve Walker: And then just a quick follow-up here, I guess either for Adam or for Steve. Just given the ongoing macro uncertainty, what's your sense of conditions in the digital ad market as we head into late summer? What are you hearing from your conversations with clients with regards to ad budgets in the second half of the year? And maybe just remind us again, what's the geographic split of your business, North America versus Europe versus other regions?

And your touch points um, that we're testing with without getting into, you know, too much kind of guidance on this. I'll just say that we're having good momentum. And, and we, you know, we continue to invest in this and like, and again, the, the main thing, we, we are trying to do is get more devices, more Partners, um, around the world that are good for advertisers and can give us more kind of unique Supply that we want to get for realize. So overall, like the business it's going faster and it's something that is relevant to realize strategy.

Steve Walker: Yeah, good questions. So first of all, on the macro side of things, we're seeing basically continued stability. So I think we've talked about in the past that, you know, the way our advertiser partners talk about their view of things is that they're keeping a close eye on things. Obviously, the tariffs and everything that's going on with the tariffs is concerning to them, but they're not cutting spend. They're just keeping an eye on it. So that's kind of what we're still hearing from our advertiser partners. So generally speaking, that has continued. And I think that's what we built into our guide, as I mentioned earlier, is basically that we expect kind of continued stability of the ad markets. In terms of our geographic split, you know, we're fairly diversified.

Stephen Walker: Yeah. First of all, on the macro side of things, we're seeing basically continued stability. I think we've talked about in the past that the way our advertiser partners talk about their view of things is that they're keeping a close eye on things. Obviously, the tariffs and everything that's going on with the tariffs is concerning to them, but they're not cutting spend. They're just keeping an eye on it. That's kind of what we're still hearing from our advertiser partners. Generally speaking, that has continued. I think that's what we built into our guide, as I mentioned earlier, is basically that we expect kind of continued stability of the ad markets. In terms of our geographic split, we're fairly diversified. With bringing on Yahoo, we're about 50% US plus, but we are pretty well diversified outside the US as well.

And just a quick, uh, quick follow up, I guess, either for Adam, or for Steve just giving the ongoing macro insertion. What's your sense of conditions in the digital ad Market, as we head into late summer? What are you hearing from your conversations with clients with regards to add budgets, uh, in the second half of the year and maybe just remind us again. What's, what's the geographic split of your business? North America versus Europe?

Versus other regions.

Yeah, good questions. So first of all, on the macro side of things we're seeing basically continued stability. So, I think we've talked about in the past that uh, you know, the way our Advertiser Partners talk about, uh, their view of things is that there's they're keeping a close eye on things, obviously the tariffs and and everything that's going on with the tariffs is concerning to them, but they're not cutting spend. They're just keeping an eye on it. So that's kind of what we're still hearing from our Advertiser Partners. So generally speaking that has continued uh, and I think

I think that's that's what we built into our. Our guide, as I mentioned earlier is uh, is basically that we expect kind of continued stability of the ad markets.

Steve Walker: We are about, with bringing on Yahoo, we're about 50% US plus, but we are pretty well diversified outside the US as well. And even where we have revenue inside the US, you know, in many cases, there are average, you know, the advertisers are spending globally with us. So it's, you know, it's brands that are trying to reach consumers globally, and we're a good global source of that because we have a lot of traffic and eyeballs outside of the US. So about 50% US, but very well globally diversified.

Stephen Walker: Even where we have revenue inside the US, in many cases the advertisers are spending globally with us. It's brands that are trying to reach consumers globally, and we're a good global source of that because we have a lot of traffic and eyeballs outside the US. About 50% US, but very well globally diversified.

James Kopelman: Great. Last quick one for Stephen Walker. I think sales and marketing G&A might have been just a touch higher than what we were modeling heading in. Anything to call out to drive the slight increase there? How should we think about modeling, I guess, expenses in H2 or any commentary on headcount?

Steve Walker: Great. Last quick one for Steve. I think sales and marketing G&A might have been just a touch higher than what we were modeling heading in. Anything to call out to drive the slight increase there? And then how should we think about modeling, I guess, expenses in the second half or any commentary on headcount?

In terms of our Geographic, split, you know, we're we're fairly Diversified. Uh, we are about with bringing on Yahoo. We're we're about 50% us plus. Uh, but we are pretty well Diversified outside the US as well. And even where we have Revenue inside the US, uh you know, in many cases uh there are, you know, the advertisers are spending globally with us. So it's uh, um. You know, it's a brands that are trying to reach consumers globally and we're a good Global source of that because we have a lot of traffic and and eyeballs outside of the US so about 50% us, but very well. Globally Diversified.

Steve Walker: Yeah, so the first quarter and second quarter had a couple of unusual timing items between the two. So if you look at our first quarter expenses and then our second quarter, first quarter was lower, second quarter ticked up quite a bit. I would look at the average of those two quarters to give you a good sense of what the third quarter and fourth quarter will be. So second quarter was actually higher than it should have been because of the timing issues with Q1. So think of the average of those two quarters going forward. I think that's the best way to look at it, frankly.

Stephen Walker: Yeah. The Q1 and Q2 had a couple of unusual timing items between the two. If you look at our Q1 expenses and then our Q2, Q1 was lower, Q2 ticked up quite a bit. I would look at the average of those two quarters to give you a good sense of what the Q3 and Q4 will be. Q2 was actually higher than it should have been because of the timing issues with Q1. Think of the average of those two quarters going forward. I think that's the best way to look at it, frankly.

Great. So last last Quick 1 for uh Steve I think sales and marketing is GNA might have been just a touch higher than what uh what we were modeling heading in um any anything to call out drive to drive the um uh slate increase there. And then how should we think about modeling, I guess expenses in the second half for any commentary on headcount?

James Kopelman: Okay, great. Very helpful. Appreciate all the color today, guys.

Steve Walker: OK, great. Very helpful. Appreciate all the color today, guys.

Yeah. So the um the first quarter and second quarter had a couple of unusual timing items between the 2. So if you look at our first quarter expenses and then our second quarter, first quarter was lower second quarter ticked up a lot quite a bit. I would look at the average of those 2 quarters to to give you a good sense of what the uh third quarter and fourth quarter will be. So second quarter was actually higher than it. It should have been because of the timing issues with q1 so think of the average of those 2 uh quarters going forward. Um I think that's the best way to look at it, frankly.

Adam Singolda: Thanks.

Jason Helfstein: Thanks.

Okay great. Uh, very helpful. Appreciate all the uh the color today guys.

Operator: Thank you. This concludes the question and answer session. I would now like to turn it back to Adam Singolda, CEO, for closing remarks.

Adam Singolda: Thank you. This concludes the question and answer session. I would now like to turn it back to Adam Singolda, CEO, for closing remarks.

Thanks.

Adam Singolda: Thank you, everyone, for joining us this morning. As you see, we've had a strong Q2 and ready to build on this momentum throughout the year. Realize, which is our main focus as a company to grow spend from advertisers and grow Taboola, is early days, but we like what we're seeing, and we're just getting started. We're laser-focused, going after the performance advertising market, giving advertisers choice beyond Google and Meta. Thanks again, everyone, for continued support. We're looking forward to talking to all of you in weeks to come.

Jason Helfstein: Thank you, everyone, for joining us this morning. As you see, we've had a strong second quarter and we're ready to build on this momentum throughout the year. Real life, which is our main focus as a company to grow spend from advertisers and grow Taboola, is early days, but we like what we're seeing and we're just getting started. We're laser-focused, going after the performance advertising market, giving advertisers choice beyond Google and Meta. Thanks again, everyone, for continued support, and we're looking forward to talking to all of you in weeks to come.

Thank you. This concludes the question and answer session, I would now like to turn it back to Adam single the CEO for closing remarks.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Adam Singolda: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Thank you everyone for joining us. Uh, this morning. Uh, as you see we've we've had a strong second quarter and ready to build on this momentum throughout the year realize, which is our main focus as a company to grow, spend from advertisers and grow to bulum is early days. But we like what we're seeing? And we're just getting started. We're laser focused gone after the performance advertising Market, given advertisers Choice Beyond Google and meta. Uh, thanks again. Everyone for continuing support. And we're looking forward to talking to all of you in weeks to come.

Thank you for your participation. In today's conference, this does conclude the program. You may know disconnect.

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