Taboola.com’s Earnings Call Contradictions: Google Policy, Publisher Cleanup, and DeeperDive Monetization Signals Don’t Match

Date of Call: Aug 5, 2026

Financials Results

• Revenue: $476.8M, up 2% YOY, below guidance
• Operating Margin: Adjusted EBITDA margin of 29% (29% vs 33% on a constant currency basis)

Guidance:

• Q3 revenue expected between $460M and $473M.
• Q3 gross profit expected between $148M and $152M.
• Q3 XTAC gross profit expected between $184M and $190M.
• Q3 adjusted EBITDA expected between $51.5M and $56.5M.
• Q3 non-GAAP net income expected between $38M and $42M.
• Full-year revenue guidance raised to $1.93B to $1.96B.
• Full-year gross profit guidance raised to $605M to $615M.
• Full-year XTAC gross profit guidance raised by $7M at the midpoint to $772M to $783M.
• Full-year adjusted EBITDA guidance raised by $3M at the midpoint to $228M to $240M.
• Full-year non-GAAP net income guidance raised to $168M to $176M.

Business Commentary:

Revenue and Key Metrics Performance:

• Taboola's revenue grew 2% year-over-year to $476.8 million in Q2 2026.
• Despite this growth, revenue was below guidance due to a more aggressive cleanup of low-quality publishers and the impact from Google's policy changes deprecating the Explore More feature.

XTAC Gross Profit Growth:

• XTAC gross profit increased 12% year-over-year to $192.4 million.
• This growth was driven by an increase in ad rates and a shift in business mix towards higher-margin areas following supply reduction efforts.

Strategic Publisher Expansions:

• Taboola announced a significant expansion with a major publisher, moving beyond native ads to monetize display, vertical format, and native content.
• This partnership demonstrates a shift towards consolidating ad tech partnerships for publishers, enhancing efficiency and revenue potential.

Impact of Google Policy Changes:

• Google's policy change resulted in over $20 million impact on XTAC in the second half of 2026.
• The change deprioritized the Explore More feature, affecting user engagement on publisher sites.

Share Repurchase and Financial Position:

• The company repurchased approximately 9 million shares for $41 million, representing about 20% of outstanding shares since the beginning of 2025.
• This action reflects disciplined capital allocation, maintaining a balance between growth investment and shareholder returns.

Sentiment Analysis:

Overall Tone: Positive

• "The second quarter was another important step forward for Taboola. we continued to execute and delivered results above our guidance across our key metrics." "We continue to make meaningful progress against our strategic priorities." "We're excited about the momentum we're building." "We continue to execute across the business and raise our full year exec guidance." "We're building a stronger, more durable business and are excited about the path ahead."

Q&A:

• Question from Naved Khan (B. Reilly Securities): Last update on Deeper Dive user engagement and Realize Plus advertising budget allocation and ROI efficiency?
  Response: Deeper Dive is approaching 10 million users, with over 10% engagement on publisher sites; performance is 5-10x better than traditional CPMs. Realize Plus has 300 advertisers in beta, with early results showing improved ROI and efficiency.

• Question from Barton Crockett (Rosenblatt): Size of the financial impact from Google's Explore More deprecation and other exposures to Google policy changes?
  Response: The Google policy change impacted over $20M of XTAC in the second half of 2026; it was a one-time event, and no other major products have similar Google dependencies.

• Question from Barton Crockett (Rosenblatt): Size of the revenue impact from cleaning up low-quality publishers?
  Response: The combination of network cleanup and Explore More deprecation made up the majority of the revenue shortfall; it is viewed as a short-term pain for long-term gain in advertiser performance.

• Question from Barton Crockett (Rosenblatt): Broader sense of macro support for ad flow across the network?
  Response: The advertising environment remains relatively stable, though advertisers are skittish due to external factors like geopolitical and inflation concerns.

• Question from James Kobelman (TD Cowan): Timeline for Deeper Dive chatbot engagement becoming a significant driver and adoption rate by publishers?
  Response: Deeper Dive is already accretive to revenue (10% growth from 10% adoption) and is driving competitive wins; the goal is to move as fast as possible, with significant monetization potential.

• Question from James Kobelman (TD Cowan): Potential for agentic AI to drive efficiency gains within Taboola and quantification of Q2 impacts from three factors?
  Response: AI is being used to improve productivity and automate processes internally, but quantification is premature. The Q2 revenue shortfall was mainly due to Google's policy change and network cleanup, with a smaller impact from search referral declines.

• Question from Tyler G. Mateo (BTIG): Nature of the low-quality publishers removed and geographic breakdown of revenue impact?
  Response: Removed publishers were primarily international, mostly in the greater China region, with low-performing traffic. The network cleanup impact was more international, while the Google policy change impact was global.

• Question from Brianna Diaz (Citizens): Impact on revenue per active advertiser and number of advertisers in Q2, and strategic significance of expanding to full-suite publisher monetization?
  Response: Both the number of scaled advertisers (up 2% YOY) and average revenue per scaled advertiser were impacted by the headwinds. The full-suite monetization expansion with a large publisher represents a big financial opportunity and a model for industry consolidation, aiming to become the single most important partner for the open web.

• Question from Benchmark: Revenue exposure to minimum guarantee inventory and XTAC margin outlook as the revenue base shifts to premium publishers?
  Response: Almost none of the walked-away revenue was minimum guarantee; current minimum guarantee exposure is about 13% of TAC. XTAC margins should remain in the 35-40% range long-term, driven by competitiveness, not significantly pressured by the shift to premium publishers.

Contradiction Point 1

Financial Impact and Nature of Google Policy Changes

The description of the Google policy change's financial impact and its recurrence potential shifted significantly.

Barton Crockett (Rosenblatt) - Barton Crockett (Rosenblatt)

2026Q2: The Google policy change deprecating Explore More resulted in over $20 million of XTAC impact in the second half of 2026 (and a headwind for the first half of 2027). This was a one-time event, and no other major products are as dependent on Google policy. - Adam Singolda(CEO) & Steve Walker(CFO)

What was the financial impact (revenue, XTAC, EBITDA) of Google policy changes, including the removal of low-quality publishers and exposure to other potential changes? - Barton Crockett (Rosenblatt Securities)

2026Q1: The muted bottom-line flow-through was primarily due to a $13M FX headwind (Israeli Shekel strength) impacting operating expenses. - Steve Walker(CFO)

Contradiction Point 2

Impact of Publisher Network Cleanup on Revenue Metrics

The characterization of how publisher removals affected key revenue metrics appears inconsistent.

Brianna Diaz (Citizens) - Brianna Diaz (Citizens)

2026Q2: Regarding the publisher network cleanup, it was the primary driver of the shortfall between revenue guidance and actual results, alongside Explore More. - Steve Walker(CFO)

How did the removal of low-quality publishers impact Q2 revenue per advertiser and advertiser growth, and what is the strategic significance of expanding from single-article placements to full-suite monetization? - Brianna Diaz (Citizens, for Matt Condon)

2026Q1: The outperformance is primarily driven by Realize, which makes advertisers more successful and increases spend (evident in the 3.5% growth in scaled advertisers and 5% increase in average revenue per scaled advertiser). - Adam Singolda(CEO)

Contradiction Point 3

Adoption and Monetization Timeline for DeeperDive/LLM-Based Products

The timeline for DeeperDive to become a significant monetization driver was notably accelerated in the Q2 call.

What insights did James Kobelman provide regarding TD Cowan's performance? - James Kobelman (TD Cowan)

2026Q2: DeeperDive adoption is accelerating rapidly, with 10%+ of traffic engaging, and monetization potential is 5–10× higher than traditional native ads. - Adam Singolda(CEO) & Steve Walker(CFO)

How quickly are consumers adopting DeeperDive on publisher sites, and what is the timeline for it to become a significant monetization driver, and how is agentic AI being used internally to drive efficiency at Taboola? - Brianna Diaz (Citizens, for Matt Condon)

2026Q1: DeeperDive is growing fast with high ROAS but is still financially small. - Adam Singolda(CEO)

Contradiction Point 4

Drivers of Revenue Guidance and Business Outlook

Guidance philosophy shifts from conservative to more impacted by recent events.

Okay, let's see. The user wants me to take the input "Barton Crockett (Rosenblatt)" and turn it into a single, concise earnings-call question. The rules are pretty strict: only one line, no extra text, must end with a question mark if possible. If it's not a question or too vague, just output the original.First, I need to figure out who Barton Crockett is. The name sounds familiar. Oh, right, he's an analyst or a researcher. Rosenblatt is a research firm. So this is likely a person from a financial research company. In earnings calls, analysts often ask questions about the company's performance, strategies, etc.The input isn't a question itself, just a name. So I need to create a question that would be asked during an earnings call by Barton Crockett from Rosenblatt. The question should be relevant to earnings, maybe about financial results, future projections, challenges, or company-specific topics.Possible angles: asking about revenue growth, profit margins, market challenges, strategic initiatives, or responses to recent events. Since the input doesn't specify, I have to make a general question that's common in earnings calls. Maybe something like, "What are your thoughts on the company's Q2 revenue growth compared to industry benchmarks?" Or "How do you assess the impact of recent market trends on the company's profitability?"I need to make sure the question is concise, includes the name and firm, and ends with a question mark. Let me check the example format. The output should be exactly one line, no markdown, just the question. So combining the name with a relevant question. Maybe "Barton Crockett (Rosenblatt): What are your thoughts on the company's Q2 revenue growth compared to industry benchmarks?"Wait, but the input is just the name. The user might expect a question that would be asked by that analyst. So perhaps rephrasing it as "Barton Crockett (Rosenblatt) asks: [question]". But the rules say to output exactly the final question text, so maybe just the question without the "asks" part. Let me try: "What are your thoughts on the company's Q2 revenue growth compared to industry benchmarks, Barton Crockett (Rosenblatt)?" No, that's not right. The structure should be the question as if the analyst is asking it. So maybe "Barton Crockett (Rosenblatt): Could you discuss the company's Q2 revenue growth in the context of current market conditions?" But the user's example might require the question to be phrased as the analyst's question. Alternatively, perhaps the question is directed to the company's management. So the correct format would be "Could you discuss the company's Q2 revenue growth in the context of current market conditions, Barton Crockett (Rosenblatt)?" No, that's not right either. The analyst is asking the question, so the question should be phrased as "What are your thoughts on...?" or "Could you comment on...?" with the analyst's name in parentheses. So the final question would be something like "What are your thoughts on the company's Q2 revenue growth compared to industry benchmarks, Barton Crockett (Rosenblatt)?" But the rules say to output only the final question text. Wait, the example in the user's mind might be that the question is from the analyst, so the question is phrased as the analyst's query. But the output should be the question as it would be asked during the call. So the correct structure is the analyst's question. For example: "Barton Crockett (Rosenblatt) asks about Q2 revenue growth compared to industry benchmarks." But the user wants a question, so it should end with a question mark. Maybe "What is your assessment of the company's Q2 revenue growth compared to industry benchmarks, Barton Crockett (Rosenblatt)?" Alternatively, maybe the input is just the name, so the question is implied to be from that analyst. The output should be a question that the analyst would ask. Since the input isn't a question, the task is to create a question based on the analyst's identity. The key is to make it relevant to earnings calls. So the final question should be concise, include the name and firm, and be a typical earnings call question. Let me go with "Could you discuss the company's Q2 revenue growth in the context of current market conditions, Barton Crockett (Rosenblatt)?" But I need to make sure it's one line and ends with a question mark. Alternatively, "What are your thoughts on the company's Q2 revenue growth compared to industry benchmarks, Barton Crockett (Rosenblatt)?" Yes, that seems to fit. It's a concise question, includes the name and firm, and ends with a question mark. I think that's the best approach - Barton Crockett (Rosenblatt)

2026Q2: The Google policy change... resulted in over $20 million of XTAC impact... The publisher network cleanup... was the primary driver of the shortfall between revenue guidance and actual results. - Adam Singolda & Steve Walker(CFO)

What was the financial impact (revenue, XTAC, EBITDA) of the Google policy changes on Explore More, including the effect of removing low-quality publishers, and the degree of exposure to other policy changes? - Barton Crockett (Rosenblatt Securities)

20260225-2025 Q4: The guidance philosophy is conservative and based on current traction with Realize. The midpoint of 2026 revenue guidance is 7% growth, which reflects what we are seeing today. - Stephen Walker(CFO)

Contradiction Point 5

Impact of Publisher Network Cleanup on Advertiser Metrics

Contradiction on whether cleanup negatively impacts key advertiser metrics.

Brianna Diaz (Citizens) - Brianna Diaz (Citizens)

2026Q2: Network cleanup and the Google policy negatively impacted average revenue per scaled advertiser, though the number of scaled advertisers still grew 2% year-over-year. - Steve Walker & Adam Singolda(CFO)

How did the removal of low-quality publishers impact Q2 revenue per advertiser and advertiser growth, and what is the strategic significance of expanding from single-article placements to full-suite monetization? - Barton Crockett (Rosenblatt Securities)

20260225-2025 Q4: The variance was due to the mix of business... The key metric they focus on is ex-TAC gross profit, which they did exceed guidance for, indicating strong performance. - Stephen Walker(CFO)