TBLA

Taboola's FY2025 marks a genuine inflection: after four straight years of GAAP losses (-$24.9M in 2021 down to -$82.0M in 2023, then -$3.76M in 2024), the business posted $42.3M net income and $44.1M operating income (+70.0% YoY) on $1.91B revenue. The real story isn't the headline 38.3x P/E but the cash: $208M operating cash flow (+13.0%) less $44.9M capex leaves roughly $163M of free cash flow against a $1.47B market cap — an ~11% FCF yield — and the stock trades at just 0.8x sales. On those metrics TBLA screens cheap, and management is acting like it agrees, spending $255M (+247.0%) on buybacks in 2025.

The quality, however, is mediocre and the capital-return narrative has a glaring asterisk. Gross margin is only 29.8% — structurally capped by the ~19% guarantee/TAC cost the 10-K flags on minimum per-impression payments to publishers — and that funnels down to a 2.3% operating and 2.2% net margin with a 4.7% ROE. Revenue grew just 8.3%, and the 1,224.6% net-income and 1,400% EPS jumps are optics off a near-zero base, not a step-change in earnings power. Most troubling, shares outstanding rose 26.2% to 295M in the same year the company spent $255M repurchasing stock; whatever the mechanics (heavy SBC, class structure), shareholders are not cleanly capturing that FCF on a per-share basis, and cash fell 46.7% to $121M to fund the program.