Taboola swings to profit in Q1 as performance advertising drives growth

Taboola (NASDAQ:TBLA), a leading provider of performance advertising for the open web, reported first-quarter 2026 results that surpassed analyst expectations and signaled a sharp pivot toward profitability.

The company leveraged its AI-driven "Realize" platform to capture a larger share of the performance marketing market, resulting in a swing from a net loss a year ago to a significant profit.

Total revenues for the quarter ended March 31, 2026, reached $466.4 million, a 9.1% increase compared to the $427.3 million reported in the first quarter of 2025.

Gross profit rose 8.6% to $129.6 million.

A key metric for the company, ex-TAC gross profit—which represents revenue after traffic acquisition costs—grew 10.8% to $168.1 million, reflecting improved monetization efficiency.

The quarter’s most notable highlight was the company's bottom-line recovery.

Taboola reported a net income of $59.1 million, a substantial turnaround from the $8.8 million net loss recorded in the prior-year period.

This profitability surge was supported by disciplined cost management and the high-margin nature of its proprietary data and algorithmic targeting tools.

The company's cash generation remained robust, with cash flow from operations totaling $108.7 million.

Free cash flow for the quarter was $90.3 million, providing the firm with ample liquidity to execute its capital allocation strategy.

Based on the strong start to the year, Taboola raised its full-year 2026 guidance

While revenues is now expected between $2,006 million and $2,062 million, Ex-TAC gross profit is expected to come in between $760 million and $781 million.