Good day, and thank you for standing by. Welcome to Taboola.com Ltd.'s fourth quarter and full year 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Adam Anwar, Head of Investor Relations. Please go ahead.

Thank you, and good morning, everyone. And welcome to Taboola.com Ltd.'s fourth quarter and full year 2025 earnings conference call. I am here with Adam Singolda, Taboola.com Ltd.'s founder and CEO, and Stephen Walker, Taboola.com Ltd.'s CFO. The company issued earnings materials today before the market and they are available in the investor section of Taboola.com Ltd.'s website at investors.taboola.com. Now I will quickly cover the safe harbor. Certain statements today, including our expectations for future periods, are forward-looking statements. They are not facts and are subject to material risks and uncertainties described in our SEC filings. These statements are based on currently available information and we undertake no duty to update them, except as required by law. Today's discussion is also subject to the forward-looking statement limitations in the earnings press release. Future events could differ materially and adversely from those anticipated. During this call, we will use terms defined in the earnings release and refer to non-GAAP financial measures. For definitions and reconciliations to GAAP, please refer to the non-GAAP tables in the earnings release posted on our website. With that, I will turn the call over to Adam.

Thanks, Adam. Good morning, everyone, and thank you for joining us today. We are closing up 2025 with another strong quarter, exceeding the high end of our guidance across our key metrics. The year has been defined by disciplined execution, and more importantly, we are seeing clear early signs of acceleration in the growth of the business from our new advertising platform, Realize. In 2025, we repurchased 77 million shares for a total of $254 million, reducing our share count by roughly 18% while continuing to invest in R&D to support our long-term growth ambitions. Before getting into the details, let me remind you who we are. Taboola.com Ltd. is one of the largest performance advertising companies outside of search and social, focused on the open web. Every day, billions of consumers read, watch, and engage with trusted publishers and communities across the open web. Similar to how Google and Meta understand intent within their own platforms, Taboola.com Ltd. understands intent across the open web and turns it into measurable outcomes for advertisers. When someone reads about the Knicks, plans a vacation, or checks the latest news on their favorite local site, we transform that moment of interest into measurable results for advertisers. That scale, that proprietary intent data, and the AI-driven conversion machine we built, that is Taboola.com Ltd. Turning to our results. In 2025, ex-TAC gross profit reached $714 million, up 7% year over year, and adjusted EBITDA grew 7% to $260 million. We began the year guiding for 2% and exited the year at 7%, a clear acceleration, which I am happy about. While I believe double-digit growth is the right long-term pace for this business, we are not there yet, but our 2025 performance gives us the confidence we are going in the right direction. We also generated $163 million in free cash flow, up 10% year over year, representing approximately 76% conversion from adjusted EBITDA. Looking ahead, we expect 7% ex-TAC gross profit growth and 30% adjusted EBITDA margins while continuing to invest in accelerating our growth rate and continuing our primary use of cash to aggressively repurchase shares. In 2025, Realize, our advertising platform, helped increase the number of scaled advertisers and grow the budgets we manage for them. In 2025, scaled advertisers grew 6%, with an average revenue per scaled advertiser up 2%. These results are reflected in the financial performance I shared earlier. A strong example is personal finance, one of our ideal customer profiles. Advertisers such as NerdWallet, Motley Fool, and Queen Street adopted Realize and leveraged newer capabilities like predictive audiences and format diversification. As a result, they grew meaningfully beyond their historical spend levels, with some becoming top advertisers at Taboola.com Ltd. When I think about what will continue accelerating Taboola.com Ltd.'s growth, I am laser focused on improving retention rates and increasing spend over time. While many things can help, this is the most important one. Examples like these are encouraging and reinforce that our strategy is working. As we look ahead, we are concentrating on these three priorities. First, investing in our technology to continue to advance Realize as we continue to expand our strategy to become the leading performance advertising company outside of search and social. We are investing heavily in AI-driven optimization, predictive targeting, onboarding automation, and stronger measurement and attribution to make the platform even more intelligent and easier to adopt while directing budgets toward the best-performing opportunities. While I think we are making good progress, there is a lot more for us to do here, and our R&D team is hard at work rolling out capabilities that advertisers are asking us to further drive advertiser success. Second, we restructured our sales organization around the ideal customer profile, where we were seeing stronger retention and spend growth over time. The advertiser outcomes we delivered in 2025 are giving us clear signals on which advertisers to prioritize, how to reach them, and what success on Realize should look like. To further support these efforts, we recently welcomed Khushan Bhatia as our new Chief Business Officer overseeing revenue and partnerships and bringing additional focus and expertise to supercharge advertiser, agency, and publisher relationships to accelerate growth. Keeping with the same example I mentioned earlier, in 2025, we generated $120 million in personal finance revenue within a $15 billion US market. Today, we capture only 1% to 10% of advertisers' total spend, which underscores the significant runway ahead as we deepen those relationships. At the same time, we are prioritizing new advertisers similar to the ones already succeeding on our platform and entering those conversations with a clearer understanding of their goals and what performance they should expect from Realize. By focusing on the right advertisers, not just volume, we are strengthening partnerships, expanding wallet share, and positioning Taboola.com Ltd. as a core long-term growth channel for advertisers. Lastly, on brand and perception. Since launching Realize one year ago, we have made meaningful progress in how advertisers view Taboola.com Ltd. As advertisers see clear results and expand their budgets with us, we are building trust and steadily positioning ourselves as a platform advertisers should test and scale beyond search and social. There is still work ahead, but Realize is proving to be a strong engine, not only for performance, but also for long-term brand credibility. As we think about our partners and the open web in the context of structural advantages, anyone can download an open-source Llama and get going. AI is a commodity. But that alone cannot replicate Taboola.com Ltd.'s greatest advantages. AI can replicate features. It can improve interfaces. It can even outperform some raw models we developed. It just does not matter. Without proprietary data and distribution, it is a very powerful engine with no fuel. Our data is our fuel, and it is unique to Taboola.com Ltd. Hundreds of millions of times every year, people across our network make decisions to buy or take action. That creates a very rare form of performance-driven intent data that directly determines advertisers' outcomes. Think of it as a secret language of intent that exists only because of our deep integrations across the open web and our singular focus on performance advertisers. Without these signals, advertisers cannot effectively optimize, scale, or generate strong returns on investments. We get this data by having code on page integrated across 14,000 publisher properties such as ESPN, Yahoo, USA Today, The Independent, and many others, giving us first-party access to more than 600 million daily users. Those direct relationships built over many years generate real-time intent signals at massive scale. When I look at our partners, what stands out is the strength of their brand, the trust, and communities they have built over many years. Users go directly to those, whether through their websites or their dedicated apps. As a result, they have little to no reliance on search traffic, while direct traffic continues to grow. These dynamics keep our company-wide exposure to search in the single-digit percentages, with about a third of our supply coming from in-app usage. In an AI-driven world, two assets ultimately matter most: proprietary data and distribution. And we have both. In summary, 2025 was not just about beating the number, but rather a validation that our strategy is working. We executed with discipline, accelerated the business, returned significant capital to shareholders, and invested heavily in the platform shaping our future. Realize is delivering the type of results we want to see, making new and existing advertisers successful while changing how the market sees Taboola.com Ltd. We are still early, but we are operating with greater clarity and urgency than ever. Our mission remains to help performance advertisers grow, help publishers win, and build the leading performance advertising company beyond search and social. As more players compete for advertising budgets, they will all need a trusted friend, and Taboola.com Ltd. is a great friend. With that, I will hand it over to Steve.

Thanks, Adam, and good morning, everyone. We are pleased to close out the year on a strong note. In the fourth quarter, we continued to build on the momentum we generated throughout the year, delivering results that exceeded the high end of our guidance across our key metrics. Revenues in the fourth quarter grew 6% to $522.3 million and for the full year increased 8% to $1.91 billion. One of our key priorities this year was expanding advertiser budgets, and with the rollout of Realize, our performance advertising platform, and the introduction of new embedded features, we were able to successfully execute on that objective. This momentum was reflected in our scaled advertiser metrics in the fourth quarter, with a 3% increase in the number of scaled advertisers and a 2% increase in average revenue per scaled advertiser. We also enjoyed strong growth from non-scaled advertisers during the quarter, which contributed about 1% to our year-over-year growth. This indicates that we had a large number of advertisers testing Realize for the first time, even if we have not had a chance to scale them as of yet. For the year, scaled advertisers grew 6% and the average revenue per scaled advertiser grew 2%. Realize continued to improve retention and increase ad spend among existing advertisers compared to the same period in the previous year. As I have noted in prior quarters, we are particularly encouraged by growth in the number of scaled advertisers as they continue to be an important driver of future growth. Ex-TAC gross profit in the fourth quarter was $212.8 million, representing margins of approximately 41%. The fourth quarter results were flat year over year as expected due to the lapping of a challenging comparison with a strong Q4 2024. For the full year, ex-TAC gross profit grew 7% to $713.5 million. This growth was largely driven by the scaling of Realize, which drove growth in advertiser spend as well as continued strong performance from Taboola News. Gross profit for the quarter reached $175.6 million with full-year gross profit totaling $569.5 million. In addition to growth in ex-TAC gross profit, this performance was driven by lower depreciation expenses on our servers following a reassessment of their useful lives, as well as tax efficiencies, both of which offset higher hosting and data costs required to support the growth and scaling of our business. In the fourth quarter, net income was $50.1 million with non-GAAP net income coming in at $79.1 million. For the full year, net income was $42.3 million with non-GAAP net income coming in at $168.6 million. Adjusted EBITDA for the quarter was $86.1 million. For the full year, adjusted EBITDA was $215.5 million, representing a margin of 30%. This reflects continued discipline in expense management while maintaining targeted investments to support long-term growth. Foreign exchange was a meaningful headwind in the quarter. On a constant currency basis, Q4 ex-TAC gross profit saw a tailwind of approximately $4 million while operating expenses saw a headwind of approximately $7 million, primarily reflecting the strength of the Israeli shekel where we have a significant employee and cost base. In total, FX represented roughly a $3.5 million headwind to Q4 EBITDA and about $11 million for the full year. Without this FX headwind, our full-year adjusted EBITDA would have been $226.3 million, which would have represented an EBITDA margin of 31.7%. In terms of cash generation, we had $59.7 million in operating cash flow in the fourth quarter and free cash flow of $46.9 million. For the full year, operating cash flow amounted to $208.4 million and free cash flow was $163.4 million, representing a 76% conversion from adjusted EBITDA. On average, our free cash flow conversion from adjusted EBITDA has remained above 70% over the last twelve consecutive quarters. As a reminder, last quarter, we indicated that we now believe we can sustainably convert free cash flow at a 60% to 70% rate over any typical four-quarter period. That is an increase from our prior expectations of 50% to 60%. Capital expenditures in 2025 included internally developed software that was capitalized during the year, and we expect these strategic investments to continue into 2026. These investments were primarily driven by three initiatives: continued development of Realize, investment in new publisher-focused product capabilities, and investments in our ecommerce platform. Turning to the balance sheet. We remain in a strong financial position. We ended the fourth quarter with a net cash balance of $18.6 million. Cash and cash equivalents totaled $120.9 million, which more than offset our long-term debt of $102.3 million. Early in 2025, we secured a $270 million revolving credit facility which enabled us to fully repay our prior term loan while maintaining approximately $168 million of available liquidity as of December 31. The facility also reduced interest expense by $1.1 million in the fourth quarter and $4.8 million for the year. We remain focused on disciplined capital allocation, prioritizing R&D investments while returning capital to shareholders via share repurchases. In the fourth quarter, we repurchased approximately 18.6 million shares at an average price of $3.78 for a total consideration of $70.5 million. For the full year, we repurchased 76.9 million shares at an average price of $3.30, which represented total repurchases of over $250 million. In 2025, we bought back about 8% of our outstanding shares net of issuances. This reduced our total shares outstanding to approximately 276 million at the end of 2025 from about 337 million at the end of 2024. Since the inception of our share repurchase program in 2023, we have repurchased a total of 110.4 million shares at an average price of $3.49 for a total consideration of $383.5 million. We currently have approximately $180 million remaining in our authorization and intend to continue to use a majority of our free cash flow to repurchase shares. Moving to guidance, for the first quarter of 2026, we expect revenues to be between $444 million and $462 million, gross profit to be between $119 million and $125 million, ex-TAC gross profit to be between $158 million and $164 million, adjusted EBITDA to range from $20 million to $26 million, and non-GAAP net income to be from negative $1 million to positive $7 million. For the full year 2026, we expect revenues to be between $1.99 billion and $2.05 billion, gross profit to be between $601 million and $621 million, ex-TAC gross profit to be between $753 million and $774 million, adjusted EBITDA to be $222 million to $236 million, and non-GAAP net income to be $165 million to $191 million. I would note that our adjusted EBITDA guidance reflects a forecasted headwind from foreign exchange rates of $11 million in operating expenses partially offset by ex-TAC tailwinds. Without this headwind from foreign exchange, adjusted EBITDA margins would have been over 31%. In summary, Q4 results exceeded the high end of our guidance across our key metrics, reflecting strong execution and continued momentum in the business. We are building on the traction we have seen with Realize and are focused on accelerating growth as our initiatives gain more traction this year. While we remain disciplined in our approach, the progress to date reinforces our confidence in our ability to return to sustainable double-digit growth over time.

At this time, we will conduct a question-and-answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Please standby while we compile the Q&A roster. Our first question comes from Barton Crockett from Rosenblatt. The floor is yours.

Okay. Thanks for taking the questions. Let me see. One thing I was curious about, you did not really address it in the commentary, and I realize maybe this means it is not a KPI, but there was a substantial variance in your revenues versus where you were guiding for the quarter. And I was just wondering if you could talk through what that variance was, why it happened, and how meaningful that is.

Sure. I can take that. Hi, Barton. So I think, very simply, it was revenue mix, or mix of business. We had more business in some of our higher-margin parts of our business and a bit less revenue in some of our lower-margin areas. Ultimately, it was just mix of business. Obviously, for us, gross revenue is not the key metric. Ex-TAC is the key metric because that is what we keep after we pay publishers. You have probably heard me say a bunch of times in the past that we can grow gross revenue by doing bad business—signing up a bad publisher deal or doing something that does not drive ex-TAC—and that is not helpful. What we care about is ex-TAC. We are obviously happy that we had the beat on ex-TAC, which is really what we focus on. The rest of it was just mix of business.

Okay. And then you guys gave the commentary about the growth in non-scaled advertisers suggesting some success with Realize initiatives to grow penetration and other elements of the page beyond bottom-of-page, which sounds encouraging, but your guidance suggests kind of a steady revenue trajectory versus acceleration. I was wondering if you could talk through that disconnect. How optimistic are you that this can bring enough new in to move the top line, and why is that not reflected in the guidance you give?

Yeah. So I think, ultimately, our guidance philosophy as a company is always to be relatively conservative. We do not want to get ahead of ourselves. What our guide basically implies right now for 2026 is what we are seeing from Realize at this point in time. We have obviously seen good progress with Realize over the course of last year. We started last year guiding at 2%. We ended the year at 7% growth. We are now midpoint of our guide for 2026 at 7%. That is because that is basically what we are seeing from Realize today. We do have initiatives that we think will help improve that over time, and Adam can probably talk to a few of those initiatives that he thinks will drive growth this year. Those are not factored into the guide yet. For now, what we are factoring in the guide is exactly what we are seeing today.

Well, hi. Good morning. I think in general, we are encouraged by seeing our investments in Realize at the center of our strategy progressing. There are three things I mentioned. The first one is focusing on our technology side, and we are seeing better retention for new advertisers, which is probably what we want to see the most, and we are seeing growth in spend over time. The second thing—and that results in scaled advertisers growing—and all those things are positive signs that we are progressing in our strategy and its results in our numbers, you can see from 2025. The second thing, I just came back from Bangkok, from Madrid, from Chicago, spending time with our 600 sellers. It is really incredible to spend time with our people and seeing that when you sell to the right clients—we call those ideal customer profiles—we are seeing essentially we have what it takes. The chances for, again, example, the chances for a financial advertiser to succeed with us is not too different if they were to spend with Meta, which is incredible because it means that there is so much growth for us within our existing market that we are going after. So the second thing is just sales focus and going after the ones that we know chances for success are much higher. And the third one is continuing to invest in our brand. It is quite, for me, always encouraging to see how many advertisers do not even know Taboola.com Ltd. is out there. There are so many great advertisers that should try Taboola.com Ltd. that will succeed with us or that have a good chance to succeed with us. As part of that, I think continuing to invest in our brand perception and our brand in general will continue to help us attract new advertisers to try Taboola.com Ltd. and succeed with us. So all those three things make us encouraged.

Alright. Thank you.

Thanks, Barton. Thanks.

Thank you for your question. Our next question comes from Matthew Dorrian Condon from Citizens Bank. The floor is yours.

Thank you so much for taking my questions. Adam, you talked about making incremental investments behind the product features in Realize. Can you dig into some of those and what we should expect from a product perspective in 2026? And then I was wondering if you could break down a little bit more as we look at Realize—how much is coming from existing advertisers and you tapping into incremental budget there versus bringing in new clients onto the Taboola.com Ltd. platform? Thank you so much.

Sure. I will let Steve speak about the numbers. The biggest investment we are making, and I think the biggest opportunity for Realize—and we will share more throughout the year, so I want to let the team bring this to market in a more detailed way—but in general, where I think we have the biggest opportunity is making it more automatic and simpler for advertisers to be successful. If you look at the amount of permutation that exists when you buy from any channel—whether that is Google, Meta, Taboola.com Ltd., and others—it is complicated to succeed as a performance advertiser. Even right now with Taboola.com Ltd., with Realize, I think we made tremendous progress in terms of making advertisers successful. In my vision, I really want anyone that has a chance, that should succeed with Taboola.com Ltd., to almost automatically succeed with Taboola.com Ltd. In the world of AI, where we have so much unique intent data, we have so many thousands of advertisers that are already doing well with Taboola.com Ltd., generating $2 billion of conversions a year, I hope that Realize is a platform that if you should succeed with us, then chances are you will succeed with us, and that will be more and more automatic. Then our good people at the company can spend more of their time on strategy and being creative and going out there and helping attract more new advertisers. So, again, to me, the biggest thing that we will see from Realize later, for those who should succeed with us, will be more about automation and making it even easier to drive success.

And then to the second part of your question about whether growth is going to come from bringing new advertisers to the platform versus growing our existing, I will talk about this in the context of our scaled advertiser metrics that we release. What I would say is the precise mix is always hard to predict because, as I have talked about in the past, as we bring on more advertisers and then we scale them and they get into that scaled level of performance with us, they do drag down the average. As the number grows, the average gets dragged down because usually when we initially scale an advertiser, it is at the low end, and then we grow them over time. The exact mix is hard to predict. In general, I would say we always expect to grow the number of scaled advertisers. That is the fuel for our growth. I would think that a larger portion of our growth comes from growing the number and bringing more new advertisers to the platform, but we should see some growth in the average revenue per scaled advertiser over time as well. It will come from a bit of both, generally speaking probably more from the number, and then over time, we will grow the average as well.

Thank you so much.

Thanks.

Thank you for that question. Our next question comes from the line of Laura Anne Martin from Needham. The floor is yours.

Good morning. My first one is on generative AI. I am interested in whether how much your traffic was down in the fourth quarter and what the mix was and whether you think that—I think Wall Street thinks that is the first step in agents holding on to attention and not allowing people to go to the open web. Can you talk about why the open web survives generative AI? That is my first question. Then my second question is about Realize. One of your goals in Realize was to attract display budgets, which are quite a bit larger than native budgets, but I am interested in whether Realize is actually—are you seeing that happen, that you are getting new types of advertising rather than just staying in the narrowed native advertising bucket? Those are my two. Thanks.

Sure. Good morning, Laura. I will pick up the first one. On the open web, we basically have a very structural advantage in where we sit in the open web. We are seeing traffic going up. We are seeing search traffic going down. But overall, through primarily direct traffic to publishers and then onboarding more publishers, traffic is overall going up. The exposure we have to search traffic, which I think is the main risk that investors are tracking, for us it is in the single digit. A lot of it is because we work with massive platforms like Microsoft and Yahoo and Apple News. A third of our traffic is in app. Overall, our exposure is low, and we are seeing direct traffic going up. In general, what is going to happen is publishers that have trust, that have good communities around them, will continue to be important. Local news, sports sites, news—they will continue to get a lot of momentum and attention from consumers. I can also tell you, AI engines—what we are seeing is what they crawl on the web, the proxy for what consumers are asking—a big chunk of what consumers are talking to AI about is the last 24 hours news. People want to know what is going on. AI really needs that content, and content in the open web is where content exists. I think that for trusted publishers, for bigger publishers, which is most of our business, there is a very bright future. The second thing is that when I imagine AI being adopted by those publishers, as you know, we have a product called Deeper Dive, essentially bringing ChatGPT-type technology to those bigger publishers so that consumers can converse and talk to publishers. If you go to USA Today, you can check it out. I think there is a significant ARPU growth, a significant revenue generation opportunity for publishers when they actually adopt AI on their own sites. The risk, I think, is more on the smaller sites, which we do not have exposure to, or for those who are very dependent on search, also not a publisher that we work with. I think there is a very bright future for the trusted publishers, especially when they adopt AI in a bigger way.

And then to your second question, Laura, about are we seeing new types of advertisers coming onto the platform, I will talk about this in the context of the three growth drivers that Adam mentioned earlier. He said we are focusing on ICPs, we are investing in our brand to change perception of who we are as a company, and then we are investing in tech to make advertisers more successful. Today, that focus on ICP means we are bringing more of similar types of advertisers. What we have done is we have got our sales teams focused on finance advertisers, travel advertisers, auto advertisers, ecommerce advertisers—the ones that we know are working well on our platform today. Today, our growth in advertisers is coming more from that focus on ICPs and getting more similar types of advertisers to what we have. Over time, as we get our brand perception shifted a bit—getting out of the “we are a native company” and into the “a performance platform” type of mindset—and as our tech continues to develop and we are able to target more and more granularly on our platform, we do expect that we will expand the types of advertisers. More types of advertisers will become ICPs, and we will start focusing on selling to them. Today, more of it is more advertisers of a similar type to what we have, and over time, I expect more different types of advertisers to start coming on.

Thank you very much.

Thanks, Laura. Thanks, Laura.

Thank you for your question. Our next question comes from the line of Tyler DeMatteo from BTIG. The floor is yours.

Great. Thanks for taking the question, guys. I wanted to start in terms of 2026, Steve. As you think about the advertising market this year and some of the one-off events, kind of FIFA, etcetera, is that baked into the guide? What level of visibility do you have into something like that today, and when would that start flowing through? And then my second question for Adam. On Realize and the developments, thinking about this in the context of the investment cycle for that, where do we stand in terms of the investments in the platform and the technology, etcetera? Are we going to see multiple iterations from here? Is everything largely ironed out? Those are my two. Thanks, guys.

Sure. I can start with the second one. Good morning. We are all in. We are laser focused on Realize. Like I mentioned earlier, if you look at the market that we are selling into—the performance advertisers that we are going after—with the technology we have now, I think we have what it takes to grow. We spoke about seeing inflection point in double-digit growth, and I believe in our strategy, the market, and we have what it takes. That said, we are early in our cycle in terms of investment. There is so much more that we are going to reveal this year and in years to come. When you compare Taboola.com Ltd. Realize to Meta, when you compare it to Google, to PMX, to some of the platforms out there that are serving 10 million advertisers when we serve 15,000 to 20,000, there is so much more that we want to do and intend to do to make it much easier for those who should succeed with us and become scaled advertisers to actually become ones, and that is later there. As a technology company, we are going to reveal a lot later in the year. I think we have what it takes to continue to grow and to generate 30% EBITDA within that growth rate and use most of it to repurchase shares, which we think is a great deal for the company. Most of our investment, which is significant and, like I mentioned earlier, very exciting, is can we make it so...

Then to your first question about whether the big events happening this year are factored into our guidance, the quick simple answer is yes. The way they are factored in, just to get into a little bit more detail, is the big events this year are the Olympics, World Cup, midterm elections—those things are factored in. For us, interestingly, it is more of a traffic driver than it is an advertising revenue driver. World Cup and Olympics tend to be big sports traffic drivers, and we have Yahoo Sports, CBS Sports, ESPN. We have something like eight of the 10 top sports sites in the US, and we have similar coverage globally. It is a great traffic driver for us. Our advertisers tend to be always-on performance advertisers more so than event-driven advertisers. It will drive more traffic, which is more impressions and gives an opportunity to drive more revenue from our advertisers, but it is not like a display network where maybe they have got event-driven advertisers. Same thing with elections. Elections drive big ad budgets, but a lot of that is branding campaigns for the candidates. We do get some things like fundraising campaigns where it is a direct response trying to get somebody to donate. We do not get a lot of incremental revenue in terms of the advertising side, but again, it drives eyeballs and views, and that is what is factored into our guidance.

Great. Thanks, guys. Appreciate it.

Thanks.

Thank you for your question. Our next question comes from the line of Mark Zgutowicz from Benchmark. The line is yours.

Thanks, guys. Good morning. A couple for me. Steve, just to follow on to the question on the scaled advertiser metrics. Your scaled advertiser growth was up year over year, but down sequentially. I am curious if that was in line with your internal expectations, and what is the balance between those two metrics? Meaning, do you expect to see more of a lagging effect on the revenue side, and could that inflect at some point this year relative to that growth that you have been seeing on the actual advertisers? And then second separate question, I would appreciate if you could unpack your 1Q ex-TAC margin guidance. 1Q has guided a 100 bps of expansion year over year at the midpoint, and considering that you are lapping Yahoo tests, I think that had a positive effect on margin. Are you seeing mix shift towards higher take-rate publishers, or is that being driven by yield improvements? I will just stop there.

In terms of the scaled advertiser trends, we tend to look at that year over year because there is some seasonality. Looking at it quarter over quarter can be deceptive, similar to our revenue itself. If you look at it quarter over quarter, you can see some things that may look weird, but if you look at it year over year, a lot of that normalizes. I tend to look at it year over year. I will also say the metrics bounce around a bit any given quarter, so they are tough to predict on a quarterly basis. For instance, if some of our bigger advertisers get really aggressive one quarter, they can squeeze out some smaller advertisers just because they are willing to bid more. They are hard to predict on the numbers basis. If you look at it year over year and over a longer period of time, then it tends to normalize. That is the way we tend to look at it. We tend not to look at it quarter over quarter sequentially as much. In terms of our revenue ex-TAC guide, the simple answer to your question about whether we are seeing traction in higher-margin areas is yes. We are seeing a shift in our business to higher-margin areas. Connexity, for instance, is 100% ex-TAC. If business shifts to them, that appears as higher ex-TAC margin business to us. Also, the mix between regions and specific publishers is trending in a positive ex-TAC margin direction. It is less to do with increasing yields right now, although I am hopeful that we will see that also over time. It is more mix of business today.

Okay. Got it. Appreciate that. And if I could just ask maybe one more, zeroing out here a bit. If you look at your rest of the world—roughly 35% of revenue—and that grew quite nicely in Q4. It was up about 10%, which looks like it is the fastest growth you have seen in fourth quarter ex Germany. Can you talk about any dynamics at play there in 2026 and how they compare to 2025 in rest of the world?

We are seeing nice growth internationally. By the way, you asked about margin and mix of business. That is part of it. Some of those other geos tend to be high margin for us, so as they grow, they help with our overall ex-TAC margin picture. We are seeing nice growth internationally. If you remember, we used to be about 40% US, 60% rest of world. Once we brought on Yahoo, we got back closer to 50% US, 50% rest of world. I think this past quarter, it was 47% US, 53% rest of world. I think we are going to continue to see faster growth internationally than we will in the US. That is normal because a lot of those markets we are still newer in, so we have more growth opportunities in a lot of those markets. I think that is going to continue to be true as we go forward. What you are seeing there is basically the dynamic of less mature markets versus more mature markets and higher growth in the less mature markets.

Got it. Alright. Thanks, Steve. Appreciate it.

Sure.

Thank you for the question. Our next question comes from the line of Zachary Cummins from B. Riley Securities. The floor is yours.

Hi. Good morning, Adam and Steve. Thanks for taking my question. Two for me. The first one, I thought it was a notable callout that your non-scaled advertisers still contributed about 1% to growth here in Q4, largely due to early adoption of the Realize platform. Any incremental data you can give around how you are ramping the testing process, what tends to work best when quickly scaling up from these tests to expanding to more full budgets for some of these advertisers? And then second question, Steve, it seems like we have a greater shift of adjusted EBITDA going into 2026. Can you give some context around timing of investments or other items we should consider when modeling that out?

On your first question about the non-scaled advertisers, it was an interesting effect. We saw a lot of testing budgets in Q4, and that drove 1% incremental growth, which is the first time you have seen that. In fact, if you look at the full year, non-scaled advertisers were basically down a bit year over year. Q4 was unusual in that regard. I think it is encouraging because at the end of the day, what we do want is a bunch of advertisers coming on to test our platform. Q4 is a good time for a lot of them to do that because it is where they have some of their maximum budgets, and they are looking to test new things. We found it encouraging. I am hopeful that that translates into more revenue going forward, although we are not counting on that. It was encouraging to see that. In terms of the EBITDA question that you had, the biggest impact on our EBITDA in Q1 in particular is that we have a headwind from foreign exchange rates. I mentioned that in my prepared remarks that we have about an $11 million headwind on OpEx as we head into 2026 due to foreign exchange rates, mostly the Israeli shekel. That hits first quarter and second quarter much more heavily than third quarter and fourth quarter because if you look at how the shekel declined over the course of 2025, it really took a nosedive starting sometime in Q3. That is one factor. We are also intentionally putting some of our marketing expense, especially where we are marketing to advertisers upfront, in Q1 and Q2. Our guidance reflects what we expect to happen over the course of the rest of the year on OpEx. We do have some efficiency initiatives that are going on that we think can help us in the second half. It is a little bit of some upfront costs that we knew were going to happen, foreign exchange rates, and then us expecting to get more efficient as we go through the year.

Great. Thanks for taking my questions.

Thanks for the question. Our next question comes from James McGee Kopelman with TD Cowen. The floor is yours.

Hi. Good morning, and thanks for taking the questions. First one for Adam. Given some ongoing macro uncertainty and the state of the US consumer, what is your sense of conditions in the overall digital ad market and what are you hearing from your conversations with advertisers regarding their plans for budget growth this year? And then another one for Adam. I want to ask about the ARPU opportunity for publishers adopting AI on their sites. Where are we in that process, and what kind of progress are you seeing with publishers so far? And then I will finish with Steve as well.

In general, there is a significant trend in the industry at large towards performance advertising. Last year, we announced two extended partnerships, one with Paramount and one with LG. These are big TV broadcasting companies that we are honored to be working with, and those partnerships are primarily around more ways for TV advertisers to get mid-to-low funnel metrics by working with Realize. That is a whole new type of demand opportunity for us. Remember, TV is a $100 billion market just in the US. If we can take a piece of that and prove, much like I think Amazon is doing such a good job with Prime, showing that you can buy TV and at the same time, through Amazon.com and the rest of their consumer journey, you can show that TV drives mid-to-low funnel metrics. The reason I am saying that is because I think for Taboola.com Ltd., there is a lot of growth opportunity because when you go beyond search and social, we truly become the monetization layer for the open web—the company that any advertiser and any company that is not Google and Facebook who needs someone that can generate conversions can work with. Taboola.com Ltd. is, to my knowledge, the biggest and best conversion machine outside of Google and Facebook. There is going to be a lot of growth for us in different trades, working with different types of companies as demand sources, and it is really nice to see companies like Paramount and LG—and you will see more throughout the year—partnering with us and spending more with Realize. I think we are on the right side of the industry. It is going to be much harder to be in the full funnel space or specifically in the top-of-the-funnel space. It is going to be much more important and critical, especially in this world with tariffs and things, to be the go-to company for anything outcomes, anything measurement, anything performance. On ARPU, I had many good conversations even yesterday with some of our bigger publishers. What we are seeing is two things. One, when consumers ask questions on a publisher site, they essentially become super—like you become a superhuman, a super engaged consumer. You are much more likely to engage with an ad. You are much more likely to engage with a piece of content. You are the best version of yourself. That is probably why I believe Google is very excited about Gemini, because if Google sees what we see with Dive on publisher sites, they know what we know, which is it is a very lucrative piece of interaction with consumers for advertisers. The second thing we are seeing—and we will share more data about that later in the year—is that when advertisers show up in LLM experiences, the opportunity for them to drive conversion and the CPMs we are seeing are something that I can tell you in fifteen years of doing this, I have never seen before. If we can scale that, if we can create a habit for consumers to talk to publishers they love—I love the Knicks. I will never spend five to ten minutes watching highlights and talk to ChatGPT about the Knicks. Never going to happen. But I do this every morning with my kid. We watch ESPN. We get the highlights. We read about it. It is something we like to do. If we can get those trusted, loved publishers to offer AI so consumers can talk to them, I think that is going to be a beautiful future for them and for us and for advertisers. The question is, can we create that habit? It is early stages for us, but I am encouraged by what I am seeing.

Great. And then if it is quick for Steve, you reduced the share count pretty significantly over 2025. Going forward, how are you thinking about balancing investment with returns to shareholders, especially given healthy free cash flow generation? Would you expect to continue to significantly shrink the share count? And also on Connexity, any color on ecommerce growth, how that is trending relative to the rest of the business? Thanks.

In terms of capital allocation and share buybacks, we continue to expect to use the majority of our free cash flow for share repurchases. We have said that we expect to convert 60% to 70% of our EBITDA into free cash flow, and then we expect to use a majority of that to buy back shares. If you look at our numbers and what we are guiding to this year and do the math, you can figure out how much we are expecting to buy back roughly. We have $180 million left in our authorization, so we have plenty of capacity there, and that is where we expect to use most of our capital. I will note, and we have talked about this in the past, that there is a chance that we may do small M&A. It would not be large, but it would be something that is more of a tuck-in acquisition. Beyond that, to your second question about ecommerce and how that is doing relative to the rest of the business, they had a big Q4 for us, which was great. Generally, we expect them to grow in line with the rest of our business. It is our biggest ICP segment—ecommerce—and I think generally we expect them to have the most success out of any of our ICPs right now. It is a strong performing part of our business.

Sure.

Thank you for your question. This does now conclude the Q&A portion of the session. I would now like to turn it back to Adam Singolda, CEO, for closing remarks.

Thanks, everyone, for being with us this morning. As you can tell from our excitement, 2025 was not just about beating the numbers. It was a turning point for the company. It is a clear validation that Realize is working on our way to become the monetization layer for the open web. As Realize continues to gain traction, with our proprietary intent data and deep distribution across the open web, all of those things make us really special, and it makes us different in an AI-driven world. We believe these structural advantages position us to build and win the opportunity to become the leading performance advertising company beyond search and social. We are still early, but we are operating with a lot more clarity and more urgency than ever. Our focus remains simple: make new advertisers stay and get existing ones to spend more. Thank you all for the trust and the partnership, and we look forward to spending time over the next few weeks.

Thank you. We appreciate your participation in today's conference. This does conclude the program. You may now disconnect.