Taboola beats estimates as profit turns positive
Digital advertising platform reports 12% revenue growth with strong free cash flow generation
Taboola delivered stronger-than-expected fourth-quarter results, swinging to a profit as the digital advertising platform continued its turnaround under the leadership of founder Adam Singolda.
The content discovery company reported earnings per share of 17 cents for the quarter ended December 2025, handily beating analyst estimates of 9 cents, according to company filings. Revenue climbed 12.2% to $522.3 million, exceeding the consensus projection of $465.6 million.
The profit of $50.1 million marked a dramatic reversal from the $33.1 million loss Taboola recorded in the same period a year earlier. The company also generated $163.4 million in free cash flow for the full year, underscoring its improving operational efficiency.
"We are pleased to report another quarter of strong execution and strategic progress," Singolda said in the earnings announcement. "Our continued investment in AI-driven content discovery is delivering results for both publishers and advertisers."
Taboola's financial turnaround comes amid broader growth in the native advertising market, which was valued at approximately $147 billion in 2025. The shift toward privacy-compliant, first-party data strategies has benefited performance-focused ad platforms like Taboola as brands seek alternatives to third-party cookies.
The company reduced its outstanding share count by 18% during the period, returning capital to shareholders through repurchases. The stock, which had declined 24% in the weeks leading up to the earnings release, moved modestly lower in Wednesday trading, down 0.49%.
Despite the muted initial market reaction, analysts remain largely positive on the stock. The average price target of $4.80 represents 54% upside from current levels, with a Moderate Buy rating based on four Buy and four Hold recommendations.
Rosenblatt Securities initiated coverage in December with a buy rating and a $6.00 price objective, citing Taboola's growing share of the performance advertising market. Wall Street Zen upgraded the stock from hold to strong-buy in November, reflecting confidence in the company's competitive positioning.
Taboola's momentum throughout 2025 included expanding partnerships with major publishers including TIME, Gannett, and Nexstar. The company projected it would pay out more than $1.5 billion to publishers and original equipment manufacturers (OEMs) in 2025, highlighting its role as a critical monetization partner in the digital media ecosystem.
Third-quarter revenue had already demonstrated strong growth, reaching $496.8 million, a 15% year-over-year increase with an adjusted EBITDA margin of 27.3%. The fourth-quarter results suggest Taboola sustained that momentum through year-end.
Looking ahead, investors will be watching for guidance on 2026 and commentary on advertiser demand trends. The digital advertising market faces ongoing macroeconomic uncertainty, but Taboola's focus on performance-based outcomes and AI optimization could provide resilience in a challenging environment.
The company will host its earnings conference call at 8:30 a.m. Eastern Time to discuss the results and outlook in greater detail.