Taboola (NASDAQ:TBLA) shares fell nearly 17% in pre-market trading on Wednesday after the digital advertising company reported second-quarter results that missed Wall Street expectations and issued revenue guidance that came in well below analyst forecasts.
The company posted adjusted earnings of $0.01 per share, missing the consensus estimate of $0.05. Quarterly revenue reached $476.8 million, representing year-over-year growth of 2.4%, but falling short of the expected $499.4 million.
Revenue guidance disappoints investors
The biggest concern for investors was Taboola’s outlook for the coming quarters.
The company forecast third-quarter revenue of between $460 million and $473 million, well below the analyst consensus of $518.1 million. The midpoint of the guidance represented a shortfall of roughly 10% versus market expectations.
For the full year, Taboola now expects revenue of between $1.93 billion and $1.96 billion, compared with the Wall Street consensus estimate of $2.04 billion.
Profitability continues to improve
Although revenue disappointed, several profitability measures showed continued improvement.
Ex-TAC gross profit increased 11.8% year over year to $192.4 million.
Adjusted EBITDA rose 22.8% to $55.5 million, while the adjusted EBITDA margin expanded to 28.8%, up from 26.2% in the same period last year.
The company also returned to profitability, reporting net income of $4.3 million compared with a net loss of $4.3 million in the second quarter of 2025.
Company raises EBITDA guidance
Chief Executive Officer Adam Singolda highlighted the company’s progress in improving profitability despite slower revenue growth.
“We delivered another quarter beating our ex-TAC Gross Profit and Adjusted EBITDA guidance and raising our full-year guidance for both metrics,” Singolda said. “With the momentum we’re seeing with Realize, the addition of Fox News and other strategic wins, we are further strengthening our position as a leader in performance advertising.”
Looking ahead, Taboola expects third-quarter adjusted EBITDA of between $51.5 million and $56.5 million.
The company also raised its full-year adjusted EBITDA guidance to a range of $228 million to $240 million, although the stronger profitability outlook was overshadowed by weaker-than-expected revenue projections.