Taboola's Q1 2025 Earnings Call: Contradictions in Growth Expectations, Advertiser Demand, and Realize Product Impact

Realize impact on growth, impact of Chinese advertisers, growth rate expectations for the core business, advertiser demand and market conditions, and Realize product launch and impact are the key contradictions discussed in Taboola's latest 2025Q1 earnings call.



Revenue and Profitability Growth:
- Taboola reported revenue of $427 million for Q1 2025, representing a 3% increase year-over-year.
- The company's ex-TAC gross profit grew by 9% to $152 million, and adjusted EBITDA increased by 53% to $36 million.
- This growth was attributed to strong execution, solid team focus, and resilience in the company's model.

Impact of Tariffs and Market Conditions:
- Taboola experienced approximately 1% decrease in advertising spend due to a tariff impact, especially from the China market.
- Despite this, China accounted for only 5% of total Q2 revenue as of now, minimizing the impact on overall business performance.

Realize Platform Launch:
- The newly launched Realize platform has shown early promise, with positive feedback and increased interest from advertisers.
- The platform is integral in attracting new demand formats, budgets, and supply placements, enabling access to budgets previously out of reach.

Sales Optimization and Customer Profiles:
- Taboola has restructured its sales team into verticals, focusing on ideal customer profiles (ICPs) with better retention rates and lower churn rates.
- This strategic move aims to drive incremental ad spend and support business growth.

Investor Day and Market Validation:
- The Investor Day event highlighted a strong market opportunity of $55 billion in performance advertising outside of search and social channels.
- The event validated Taboola's unique positioning and technology, with partners emphasizing the need for a company focused on performance, measurement, and outcomes.