Taboola shares fall 15% after revenue misses estimates and 2026 outlook is cut
Key Facts
Taboola shares fell 15% in premarket trading on November 4 after the company reported quarterly revenue below analysts’ consensus and gave a fourth-quarter outlook range below market estimates. The company said in a statement that it posted revenue of $462.3 million in the third quarter ended September 30, down 6.9% year over year. Analysts’ revenue consensus was $474.89 million, according to an Investing.com report published the same day. Taboola gave a revenue range of $477 million to $493 million for the coming quarter, while the report put market consensus at $533.9 million. The results showed a divergence between lower sales and improved profitability measures, while the company’s full-year outlook also came in below consensus.
Gross profit rose to $152.3 million, up 9.6% from the year-earlier period, while gross profit excluding traffic acquisition costs increased to $188.8 million, up 6.8%. Net income was $18.4 million, compared with $5.2 million in the third quarter of the previous year. Adjusted EBITDA was $56.0 million, up 16.1% year over year. The adjusted EBITDA margin widened to 29.7% from 27.3% in the comparable period. The company said adjusted earnings per share were $0.06, in line with analysts’ estimates, according to the Investing.com report.
By contrast, cash flow from operating activities fell to $35.6 million from $53.2 million a year earlier. Free cash flow declined to $20.4 million, compared with $46.3 million in the comparable period. These figures come as quarterly revenue contracted despite growth in gross profit and adjusted profitability, highlighting the differing paths of operating and earnings measures. The company said large advertisers accounted for about 85% of total revenue during the quarter. Their number was 2,081, down about 4% year over year, while average revenue per advertiser was about $198,000 for the quarter.
Taboola attributed the decline in large-advertiser metrics to lower ad impression volume and the slower-than-expected rollout of its Next Engage product. The explanation places weaker ad volume and the delayed product launch among the factors that coincided with the quarterly year-over-year revenue decline. In the second quarter, the company had reported revenue of $476.8 million, up 2.4% year over year, while gross profit excluding traffic acquisition costs rose 11.8% to $192.4 million. Its annual revenue outlook at the time was between $1.930 billion and $1.956 billion. Comparing the two quarters provides context for the shift from revenue growth in the second quarter to a decline in the third, alongside continued growth in some profitability measures.
The company cut its 2026 revenue outlook range to $1,882.5–$1,898.5 million. Investing.com put the range at $1.88–$1.89 billion, against analysts’ consensus of $1.94 billion. For the fourth quarter, Taboola expects gross profit excluding traffic acquisition costs of between $204.5 million and $213.5 million, and adjusted EBITDA of between $73.5 million and $82.5 million. For the full year, the company expects gross profit of this type to be between $754 million and $763 million, and adjusted EBITDA of between $212 million and $221 million. The weaker outlook therefore covered annual revenue, alongside specified profitability ranges for the coming quarter and the year.
On its publisher network, management said full-page monetization was available to all NBCUniversal partners and that Fox News was fully activated. It also expected to complete the acquisition of Dianomi before year-end. Chief Executive Adam Singolda said the company was focused on bringing premium publishers onto its platform and increasing revenue from existing publishing partners, alongside investing in Taboola News and social commerce. He added that its priorities include "bringing more premium publishers onto our platform and increasing the revenue we generate with our existing publishing partners." The third-quarter earnings call was scheduled for November 4, 2026, at 8:30 a.m. Eastern time.