Taboola today reported second-quarter revenue of $476.8 million, below the bottom of its own guidance range by $15.2 million, after a Google policy change eliminated a product the company had expected to contribute more than $20 million of ex-TAC gross profit in the second half of 2026.

The New York-based performance advertising company published its results for the quarter ended June 30, 2026 before market open, alongside prepared remarks and an investor deck, and furnished the press release to the Securities and Exchange Commission on a Form 8-K signed by chief financial officer Stephen Walker. The filing carries the same date.

Two numbers pull in opposite directions. Revenue grew 2.4% year on year to $476.826 million, well short of the $492 million to $505 million the company had guided to for the quarter. Ex-TAC gross profit, the non-GAAP measure Taboola treats as its primary top-line indicator, rose 11.8% to $192.372 million. Adjusted EBITDA reached $55.491 million, up 22.8%, against a guidance range of $36 million to $43 million.

Net income was $4.317 million, reversing a net loss of $4.345 million in the second quarter of 2025. Diluted earnings per share came in at one cent.

The product Google's spam policy removed

The clearest new disclosure in the quarter concerns a feature called Explore More, which Taboola has sold to publishers for years as a session-depth tool. National World, one of the largest regional publishers in the United Kingdom, signed a multi-year deal in October 2024 that included Explore More alongside the Taboola Feed unit, specifically to hold visitors arriving from social platforms.

According to Walker, the feature let users discover additional sponsored content from a publisher site after clicking the back button. He added that Google policy no longer permits such products.

That policy has a date and a paper trail. Google named back button hijacking as an explicit spam violation on April 13, 2026, with enforcement beginning June 15, 2026, placing it in the malicious practices category that also covers malware distribution. The definition covers any script or technique that inserts or replaces pages in a browser history to stop a user returning to the previous page. Weeks later the conflict spread inside Google itself, when an AdSense vignette trigger was found to match the company's own definition of the violation, a collision Google resolved by removing the back button trigger from vignette ads effective on the same June 15 date.

Taboola is now quantifying what that cost. Walker said the deprecation of Explore More was expected to contribute over $20 million of ex-TAC in the second half of 2026. He also said that without the policy change, ex-TAC gross profit would have exceeded the high end of guidance. As reported, ex-TAC of $192.372 million sits inside the $189 million to $194 million range rather than above it, which makes the qualification material rather than rhetorical.

A second, self-inflicted headwind

The other drag on revenue was chosen. Taboola exited publisher relationships that did not meet its standards for advertiser success, an effort Walker described as more aggressive in the second quarter than in prior periods. The company expects the cleanup to depress 2026 revenue while improving longer-term results.

The financial trace of that decision appears in a one-time, non-cash write-off of $12.169 million in publisher prepayments the company no longer expects to recoup. Publisher prepayments are upfront cash payments made to secure inventory, amortized into traffic acquisition cost over the life of a contract. When a publisher relationship ends before the prepayment is worked off, the unamortized balance has to go somewhere. It went through cost of revenues, which is why gross profit rose only 2.9% to $139.479 million while ex-TAC gross profit rose 11.8%.

Chief executive Adam Singolda framed both pressures in his prepared remarks. "Despite those two headwinds, I'm happy with our ability to beat our key metrics, accelerate growth, and repurchase a lot of shares," he said.

Thinner supply, higher rates

Reducing supply while holding demand steady raises prices. Walker attributed the ex-TAC outperformance to exactly that mechanism, citing an increase in ad rates driven by the network cleanup and the Explore More deprecation, plus a mix shift toward higher-margin areas of the business and continued contribution from Taboola News.

Adjusted EBITDA margin, calculated as Adjusted EBITDA divided by ex-TAC gross profit, expanded to 28.8% from 26.2%. Foreign exchange took roughly $7.5 million off the figure. On a constant currency basis, Walker put Adjusted EBITDA at approximately $63 million and the margin at 33%, and said currency is expected to remain a headwind through the rest of 2026.

Operating expenses fell to $132.220 million from $135.567 million, with sales and marketing down to $67.156 million from $71.248 million. Share-based compensation declined to $14.127 million from $16.572 million. The quarter also carried $5.970 million in costs tied to the workforce reduction Taboola implemented in April 2026, which the company disclosed at roughly 6% of headcount, around 100 employees, in its first-quarter filing.

Advertiser count grows, spend per advertiser does not

Scaled advertisers, defined as those with more than $100,000 of cumulative gross spend on the network over a trailing four-quarter period, numbered 2,081 at the end of June, up about 2% from 2,046 a year earlier. That group accounted for roughly 86% of total revenue.

Average revenue per scaled advertiser was approximately $197,000, effectively flat against $196,000 in the second quarter of 2025 and down from the $208,000 peak recorded in the third quarter of that year. Walker linked the stagnation directly to the two headwinds. Growth in the advertiser base without growth in spend per advertiser is a specific pattern: distribution is holding, wallet share is not expanding.

Cash conversion narrows sharply

Cash flow from operating activities was $31.253 million, down from $47.397 million. Free cash flow, defined as operating cash flow less purchases of property and equipment including capitalized internal-use software, fell to $17.316 million from $34.161 million. Capital expenditure rose slightly to $13.937 million.

Walker reiterated an expectation of converting 60% to 70% of Adjusted EBITDA into free cash flow over any typical four-quarter period. The second-quarter conversion rate was well under that band, though a supplemental disclosure shows the gap is partly timing: cash investment in publisher prepayments consumed $11.6 million during the quarter, and cash interest expense a further $1.3 million.

Cash and cash equivalents stood at $133.052 million at June 30, against $72 million drawn on a $270 million revolving credit facility, leaving approximately $198 million of available liquidity and a net cash position of $61.1 million. Trade receivables fell to $316.740 million from $360.166 million at the end of 2025. Total assets declined to $1.548 billion from $1.610 billion.

Buybacks continued at scale. Taboola repurchased approximately 9.4 million shares at an average price of $4.42, for $41.4 million in the quarter, with roughly $114 million remaining under the existing authorization. Singolda said the company has repurchased approximately 20% of its outstanding shares since the beginning of 2025. Treasury holdings reached 126,683,068 shares at the end of June, against 110,438,588 six months earlier.

Fox News, and an unnamed publisher

Singolda named Fox News as a new addition, describing it as one of the top five publishers in the United States and an expansion of existing relationships with FOX Local, FOX Sports and FOX Weather. He characterised it as a competitive win.

A second, larger item remains unnamed. Singolda said the company expects to announce what he called a first-of-its-kind expansion with an existing publisher partner, described only as a premier media and entertainment company. The shift moves Taboola from monetizing individual bottom-of-article placements to handling display, vertical formats and native across the page. The scale estimate is the notable part: display advertising alone on that publisher represents roughly two to three times the revenue of the traditional native placements Taboola has historically monetized there.

That direction is continuous with prior moves. Taboola added display inventory across TIME, Weather Channel Digital, Gannett, Nexstar and Slate in October 2025, a step Singolda described at the time as a push beyond native. Full-page monetization extends the same logic from inventory type to inventory volume.

Both wins are expected to begin contributing to ex-TAC in the fourth quarter and to scale further in 2027.

Automation spend and the agent interface

Realize+, the automation layer Taboola launched in April 2026 as its answer to Google Performance Max and Meta Advantage+, has drawn more than 300 advertisers since its beta opened, according to Singolda.

The company also disclosed a figure for its agent interfaces. Singolda said the Model Context Protocol and Claude integrations, which let advertisers and agencies plan, launch and optimize campaigns through natural language, are carrying a few million dollars of advertiser spend. Against $476.8 million of quarterly revenue, that is a rounding error, and Singolda described the momentum as early. It is, however, one of the few disclosed spend figures attached to an agent-mediated buying interface anywhere in the sector.

Singolda restated the competitive thesis he has used since the company's first-quarter results in May: the winners will be those with either unique data that large language models cannot obtain or access to unique supply and distribution.

Guidance raised on profit, cut on revenue

For the third quarter, Taboola guided to revenue of $460 million to $473 million, gross profit of $148 million to $152 million, ex-TAC gross profit of $184 million to $190 million, Adjusted EBITDA of $51.5 million to $56.5 million and non-GAAP net income of $38 million to $42 million. The company's own slide puts the revenue midpoint at a 6% year-on-year decline.

Full-year revenue guidance is $1.930 billion to $1.956 billion, against $1.912 billion in 2025. Gross profit is guided to $605 million to $615 million. Ex-TAC gross profit guidance rose by $7 million at the midpoint to $772 million to $783 million, a 9% increase over the $714 million recorded in 2025. Adjusted EBITDA guidance rose by $3 million at the midpoint to $228 million to $240 million. Non-GAAP net income is guided to $168 million to $176 million.

The shape of the year is back-loaded. Taboola's supplemental slide estimates that the fourth quarter will carry approximately 28% of full-year revenue, 30% of ex-TAC gross profit and 41% of Adjusted EBITDA. Delivering the raised profit guidance therefore depends on a fourth quarter that has to absorb the full run-rate loss of Explore More while the new publisher wins begin contributing.

Walker also addressed the wider market directly, noting public discussion about the reduction of display ad impressions at open web publishers and stating that guidance reflects the impact of those user behaviour changes.

Why this matters

The Explore More disclosure is the first hard dollar figure attached to Google's back button policy at a named ad tech company, and it establishes a precedent worth tracking. A search spam rule written by one team at Google removed a monetization product sold by an independent vendor to thousands of publishers, with a quantified cost of more than $20 million in ex-TAC across two quarters. Publishers running comparable session-extension mechanics carry the same exposure, and the enforcement deadline has already passed.

The revenue miss sits inside a broader compression of open web inventory. Alphabet's Network segment, which pays out to external publishers, fell 4% to $6.97 billion in the first quarter of 2026, a third consecutive year of decline. Google itself argued in court filings that open web display advertising is in rapid decline, citing internal data showing the format dropped from over 40% of AdWords display impressions in January 2019 to 11% in January 2025. Publisher-side complaints have run in parallel, with impression declines of 40% reported at some properties in January 2026.

For media buyers, the mechanics of the quarter carry a concrete implication. Taboola cut supply and ad rates rose. Buyers running performance campaigns across the network are transacting against a smaller, more expensive inventory pool than three months ago, and the company has stated it intends to keep pruning. Ex-TAC margin expanded to 40% at the full-year guidance level, against 37% in 2025, which is a repricing of the same underlying business rather than an expansion of it.

For publishers, the unnamed full-page expansion is the item to watch. Consolidating display, native and vertical formats with a single partner is a structural decision about counterparty concentration, and Taboola has said openly that it intends the arrangement to serve as a model for other publishers. The estimate that display alone is worth two to three times the native placements gives both sides a number to negotiate against.

For the automation question, a few million dollars flowing through natural-language campaign interfaces is small, but it is a disclosed figure in a category where most vendors have supplied only adoption counts. Taboola reached the Russell 3000 and Russell 2000 indexes on June 26, 2026, which subjects each of these disclosures to a wider institutional audience than in prior quarters.

Timeline

Summary

Who: Taboola.com Ltd. (Nasdaq: TBLA), the New York-headquartered performance advertising company incorporated in Israel, with founder and chief executive Adam Singolda and chief financial officer Stephen Walker presenting results. Head of investor relations Aadam Anwar opened the call.

What: Second-quarter 2026 results showing revenue of $476.826 million, up 2.4% but $15.2 million below the low end of guidance; gross profit of $139.479 million, up 2.9%; ex-TAC gross profit of $192.372 million, up 11.8%; Adjusted EBITDA of $55.491 million, up 22.8%; and net income of $4.317 million against a prior-year loss of $4.345 million. Full-year ex-TAC gross profit guidance rose $7 million at the midpoint to $772 million to $783 million and Adjusted EBITDA guidance rose $3 million at the midpoint to $228 million to $240 million. The company disclosed that Google's back button policy ended its Explore More product, which had been expected to deliver over $20 million of ex-TAC in the second half of 2026, and recorded a $12.169 million write-off of publisher prepayments tied to network cleanup.

When: The quarter ended June 30, 2026. Results were released before market open on August 5, 2026, with a Form 8-K furnished to the Securities and Exchange Commission the same day. Google's spam policy provision was published April 13, 2026 and took effect June 15, 2026.

Where: Taboola operates across the open web, reaching over 600 million daily active users through publishers including NBC News and Yahoo and device manufacturers including Samsung and Xiaomi. The new publisher win is Fox News in the United States, adding to existing FOX Local, FOX Sports and FOX Weather relationships.

Why: Two forces pushed revenue below guidance. Google's spam policy prohibition on back button interception removed Explore More, a session-extension product sold to publishers, and Taboola exited publisher relationships that did not meet its advertiser-success standards. Reduced supply lifted ad rates and shifted business mix toward higher-margin areas, which is why profit measures rose while revenue fell short. The company expects new publisher wins to begin contributing to ex-TAC in the fourth quarter of 2026 and to scale further in 2027.