The quarter fell short on revenue but exceeded the prior EBITDA ceiling. Revenue was $476.8 million, below the $492–$505 million range issued three months earlier, while GAAP gross profit of $139.5 million also missed the prior $147–$152 million range. Ex-TAC gross profit reached $192.4 million, inside the prior $189–$194 million range, and adjusted EBITDA of $55.5 million was just above its $49–$55 million range. (Consolidated Statements of Income; Non-GAAP Reconciliation)
| Metric | Q2 2026 actual | Q2 2026 prior guidance / Q2 2025 | New FY 2026 guidance vs. prior FY midpoint |
|---|---|---|---|
| Revenue | $476.8M | $492–$505M / $465.5M | $1.930–$1.956B vs. prior $2.006–$2.062B |
| GAAP gross profit | $139.5M | $147–$152M / $135.6M | $605–$615M vs. prior $610–$630M |
| ex-TAC gross profit | $192.4M | $189–$194M / $172.1M | $772–$783M vs. prior $760–$781M |
| Adjusted EBITDA | $55.5M | $49–$55M / $45.2M | $228–$240M vs. prior $222–$240M |
| Free cash flow | $17.3M | — / $34.2M | — |
The full-year update is therefore not a broad raise. Management cut the revenue outlook by roughly $91 million at the midpoint and trimmed GAAP gross-profit expectations, but lifted the midpoint for ex-TAC gross profit by $7 million and maintained the midpoint for adjusted EBITDA at $231 million. In plain terms: less volume is now expected, but management expects to retain more contribution and operating profit from that volume. (Q3 and Full Year 2026 Guidance; Non-GAAP Guidance Reconciliation)
The headline ex-TAC result is less clean than it looks. The $192.4 million measure includes a $12.2 million write-off of publisher prepayments that Taboola adds back as a one-time non-cash item. That adjustment helped ex-TAC gross profit exceed GAAP gross profit by $52.9 million, wider than the $37–$42 million bridge embedded in the prior-quarter guidance. The EBITDA beat is real versus guidance, but the underlying operating comparison is not as straightforward as the headline non-GAAP result suggests. (Non-GAAP Reconciliation — Revenue to ex-TAC Gross Profit; Adjusted EBITDA Reconciliation)
Cash conversion weakened in the quarter, a counterweight to the profit improvement. Operating cash flow fell to $31.3 million from $47.4 million and free cash flow fell to $17.3 million from $34.2 million, even as adjusted EBITDA increased 23%. The filing also shows $44.6 million of quarterly share repurchases, while revolving-credit borrowings ended at $72.0 million, down from $102.3 million at year-end. (Consolidated Statements of Cash Flows; Consolidated Balance Sheets)
Net read: mixed versus expectations. The filing confirms stronger operating profitability and a higher ex-TAC outlook, but those gains come alongside a clear miss to the company’s own revenue guide and a material reduction to the full-year sales outlook. That makes this a margin-and-efficiency improvement rather than evidence of accelerating top-line demand.
Read the original 8-K on SEC EDGAR ↗