MrT11
9 months ago
Perion’s Diversification Strategy Continues to Drive Strong Performance as Company Achieves Quarterly Growth in Search, CTV and Retail Media
PERI.TA
-15.27%
PERI
-18.59%
Wed, February 7, 2024 at 6:00 AM EST
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Perion Outlook FY Revenue USD 860-880 Mln
PERI
-18.56%
Delivers Annual Year-Over-Year Growth of 16% in Revenue, 18% in GAAP Net Income and 28% in Adjusted EBITDA
NEW YORK & TEL AVIV, Israel, February 07, 2024--(BUSINESS WIRE)--Perion Network Ltd. (NASDAQ and TASE: PERI), a technology leader in connecting advertisers to consumers across all major digital channels, today reported its financial results for the fourth quarter and full year ended December 31, 2023.
"Our fourth quarter and annual results showed notable growth in Search, CTV and Retail Media, further demonstrating the positive impact of our business diversification and continued focus on technology and innovation. In 2023, we generated industry-leading adjusted EBITDA to Contribution ex-TAC margins, giving us a solid foundation for 2024," stated Tal Jacobson, Perion’s CEO.
"As advertising budgets shifted between channels, we capitalized on these trends and delivered profitable growth well ahead of the digital advertising market for 2023. We also advanced our growth strategy with the acquisition of Hivestack, a leading innovative full-stack programmatic digital out-of-home (DOOH) company with an extensive global footprint. The acquisition of Hivestack, alongside our existing offering, solidifies Perion’s differentiated offer to our customers. It’s a significant entry into the fast growing DOOH channel, which opens up new synergistic opportunities within our suite of solutions for brands and retailers. By adding critical touch points to the entire consumer journey across channels such as CTV, Audio, Out Of Home, including our products for Near-store and In-Store screens - we are transforming our Retail Media suite into a pure multi-channel, full consumer journey solution."
"Additionally, our strong cash flow from operations of $155 million for the full year of 2023, positions us well to execute additional acquisitions, further expanding our solutions and enhancing shareholder value," Jacobson concluded.
Fourth Quarter 2023 Business Highlights
Retail Media1 revenue increased 196% year-over-year to $20.2 million, representing 17% of Display Advertising revenue compared to 6% last year
CTV revenue2 increased 69% year-over-year to $14.4 million, representing 12% of Display Advertising revenue compared to 7% last year
Video revenue decreased 33% year-over-year, driven by shifting inventory from video to display to gain higher profit, representing 29% of Display Advertising revenue, compared to 42% last year
The number of Average Daily Searches increased by 37% year-over-year to 30.2 million. The number of Search Advertising publishers increased by 4% year-over-year to 162
Full-Year 2023 Business Highlights
Retail Media1 revenue increased 114% year-over-year to $49.7 million, representing 12% of Display Advertising revenue compared to 6% last year
CTV revenue2 increased 56% year-over-year to $33.5 million, representing 8% of Display Advertising revenue compared to 6% last year
Video revenue decreased 7% year-over-year, driven by shifting inventory from video to display to gain higher profit, representing 36% of Display Advertising revenue, compared to 43% last year
The number of Average Daily Searches increased by 57% year-over-year to 29.1 million. The annual average number of Search Advertising publishers increased by 18% year-over-year to 160
1
Retail Media revenue include all media channels, such as, CTV, video and others
2
Starting in the second quarter of 2023, we changed our methodology for measuring our CTV activity. We moved from measuring CTV campaigns to measuring CTV channels. The CTV growth trend under both methodologies remains in the same trajectory. Under our updated methodology, revenue generated from CTV in the fourth quarter of 2022 was $8.6 million vs. $12.5 million under the previous methodology
Fourth Quarter 2023 Financial Highlight
In millions,
except per share data
Three months ended
Year ended
December 31,
December 31,
2023
2022
%
2023
2022
%
Display Advertising Revenue
$
119.8
$
123.8
-3%
$
398.2
$
360.7
+10%
Search Advertising Revenue
$
114.4
$
85.9
+33%
$
344.9
$
279.6
+23%
Total Revenue
$
234.2
$
209.7
+12%
$
743.2
$
640.3
+16%
Contribution ex-TAC1
$
90.6
$
87.6
+3%
$
310.2
$
267.7
+16%
GAAP Net Income
$
39.4
$
38.7
+2%
$
117.4
$
99.2
+18%
Non-GAAP Net Income1
$
52.9
$
44.7
+19%
$
167.4
$
119.8
+40%
Adjusted EBITDA1
$
53.9
$
48.2
+12%
$
169.1
$
132.4
+28%
Adjusted EBITDA to Contribution ex-TAC1
59%
55%
55%
49%
Net Cash from Operations
$
50.2
$
38.2
+32%
$
155.5
$
122.1
+27%
GAAP Diluted EPS
$
0.78
$
0.79
-1%
$
2.34
$
2.06
+14%
Non-GAAP Diluted EPS1
$
1.04
$
0.90
+16%
$
3.33
$
2.47
+35%
Outlook for 20242
"Our expectations for 2024 reflect increased investments in technology and innovation to enhance our advanced multi-channel solutions, that combined with the acquisition of Hivestack will help Perion deliver strong double-digit revenue and adjusted EBITDA growth in the coming years," commented Tal Jacobson, Perion’s CEO.
In millions
2023
2024 Guidance
YoY Growth %3
YoY proforma Growth %3
Revenue
$743.2
$860-$880
17%
10%
Adjusted EBITDA1
$169.1
$178-$182
6%
10%
Adjusted EBITDA to Revenue1
23%
21%3
Adjusted EBITDA to Contribution ex-TAC1
55%
51%3
1
Contribution ex-TAC, non-GAAP Net Income, Adjusted EBITDA and non-GAAP Diluted EPS are non-GAAP measures. See below reconciliation of GAAP to non-GAAP measures.
2
We have not provided an outlook for GAAP Income from operations or reconciliation of Adjusted EBITDA guidance to GAAP Income from operations, the closest corresponding GAAP measure, because we do not provide guidance for certain of the reconciling items on a consistent basis due to the variability and complexity of these items, including but not limited to the measures and effects of our stock-based compensation expenses directly impacted by unpredictable fluctuation in our share price and amortization in connection with future acquisitions. Hence, we are unable to quantify these amounts without unreasonable efforts.
3
Calculated at revenue and adjusted EBITDA guidance midpoint.
Financial Comparison for the Fourth Quarter of 2023
Revenue: Revenue increased by 12% to $234.2 million in the fourth quarter of 2023 from $209.7 million in the fourth quarter of 2022. Display Advertising revenue decreased 3%, accounting for 51% of total revenue, primarily due to 33% decrease in Video revenue to $35.2 million due to shifting inventory from video to display to gain higher profit, partially offset by 196% increase in Retail revenue to $20.2 million and a 69% increase in CTV revenue to $14.4 million. Search Advertising revenue increased by 33%, accounting for 49% of revenue, primarily due to 37% increase in Average Daily Searches and 4% increase in the number of publishers to 162.
Traffic Acquisition Costs and Media Buy ("TAC"): TAC amounted to $143.6 million, or 61% of revenue, in the fourth quarter of 2023, compared with $122.0 million, or 58% of revenue, in the fourth quarter of 2022. The margin contraction was primarily due to product mix, partially offset by media buying optimization, which is enabled by leveraging data and buying power.
GAAP Net Income: GAAP net income increased by 2% to $39.4 million in the fourth quarter of 2023, compared with $38.7 million, in the fourth quarter of 2022. GAAP net income in the fourth quarter of 2023 includes $3.3 million acquisition related expenses and $2.1 million fair-value adjustment of the contingent consideration payable in respect to the Vidazoo acquisition.
Non-GAAP Net Income: Non-GAAP net income increased by 19% to $52.9 million, or 23% of revenue, in the fourth quarter of 2023, from $44.7 million, or 21% of revenue, in the fourth quarter of 2022. A reconciliation of GAAP to non-GAAP net income is included in this press release.
Adjusted EBITDA: Adjusted EBITDA was $53.9 million, or 23% of revenue (and 59% of Contribution ex-TAC) in the fourth quarter of 2023, compared with $48.2 million, or 23% of revenue (and 55% of Contribution ex-TAC) in the fourth quarter of 2022. A reconciliation of GAAP income from operations to Adjusted EBITDA is included in this press release.
Cash Flow from Operations: Net cash provided by operating activities in the fourth quarter of 2023 was $50.2 million, a 32% increase from $38.2 million in the fourth quarter of 2022.
Net cash: As of December 31, 2023, cash and cash equivalents, short-term bank deposits and marketable securities amounted to $472.7 million, compared with $429.6 million as of December 31, 2022.
Financial Comparison for the Full-Year of 2023
Revenue: Revenue increased by 16% to $743.2 million in 2023 from $640.3 million in 2022. Display Advertising revenue increased by 10%, accounting for 54% of revenue, mainly driven by 114% increase in Retail Media revenue to $49.7 million and 56% growth in CTV to $33.5 million, partially offset by 7% decrease in Video revenue to $143.2 million due to shifting inventory from video to display to gain higher profit. Search Advertising revenue increased by 23%, accounting for 46% of revenue, primarily due to a 57% increase in Average Daily Searches and 18% increase in the average annual number of publishers to 160.
Traffic Acquisition Costs ("TAC"): TAC amounted to $432.9 million, or 58% of revenue, compared with $372.6 million, or 58% of revenue in 2022. Media margin remained flat year-over-year.
GAAP Net Income: GAAP net income increased by 18% to $117.4 million in 2023 from $99.2 million in 2022. GAAP net income in 2023 includes $4.0 million acquisition related expenses and $18.7 million fair-value adjustment of the contingent consideration payable in respect to the Vidazoo acquisition.
Non-GAAP Net Income: Non-GAAP net income increased by 40% to $167.4 million, or 23% of revenue, from $119.8 million, or 19% of revenue in 2022. A reconciliation of GAAP to non-GAAP net income is included in this press release.
Adjusted EBITDA: Adjusted EBITDA was $169.1 million, or 23% of revenue (and 55% of revenue ex-TAC), compared with $132.4 million, or 21% of revenue (and 49% of revenue ex-TAC) in 2022. A reconciliation of GAAP Net Income to Adjusted EBITDA is included in this press release.
Cash Flow from Operations: Net cash provided by operating activities in 2023 was $155.5 million, a 27% increase from $122.1 million in 2022.
Conference Call
MrT11
1 year ago
PERI.... $28
Perion Continues to Deliver Strong Results with 17% Year-Over-Year Increase in Revenue and 29% Growth in Adjusted EBITDA
PERI.TA
-0.36%
PERI
-0.18%
Wed, November 1, 2023 at 4:11 AM PDT
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PERI
-0.18%
The company launches WAVE, a generative AI-powered dynamic audio advertising solution
NEW YORK & TEL AVIV, November 01, 2023--(BUSINESS WIRE)--Perion Network Ltd. (NASDAQ and TASE: PERI), a global technology company whose synergistic solutions serve all major digital advertising channels - including search, social, display, and video/CTV, today reported its financial results for the third quarter ended September 30, 2023.
"Once again, our business results proved that our strategically diversified model gives us the agility to deliver continued growth," stated Tal Jacobson, Perion’s CEO. "Despite macroeconomic headwinds, our third-quarter year-over-year revenue and adjusted EBITDA increased 17% and 29%, respectively. These results were made possible by the ability to leverage our technological capabilities and focus resources on the strongest industry verticals to achieve top-line profitability and margin expansion. Specifically, our Retail Media solutions are tracking to significantly exceed our annual revenue goal for 2023."
"Our diversification remains a key differentiator for Perion, powered by exceptional execution and ongoing investment in technology," added Mr. Jacobson.
Introducing WAVE
Reaffirming its commitment to technological innovation, Perion expands its advertiser suite of solutions with the introduction of WAVE (Waveform Audio Voice Engine), a generative AI-powered dynamic audio solution that enables advertisers to generate personalized audio advertising messages at scale. The power of the solution is based on advanced algorithmic AI processing which combines first-party data with voice, reaching consumer audiences with tailored audio messages that adapt in real time to parameters such as weather, location, daypart, and many others.
"We are focused on developing technology that creates deeper and more meaningful consumer experiences," explained Mr. Jacobson. "WAVE represents our commitment to changing the game for advertisers, enabling us to tap into lucrative channels and create entirely new categories. We envision a future where every consumer interaction is customized, localized and commerce-enabled."
Albertsons is an early adopter that has seamlessly integrated WAVE into several successful campaigns and is now looking to scale the solution more broadly.
"When Perion introduced us to the AI script and voice, we were blown away. It was very hard to detect that it was an actual AI voice – right down to the nuances of how certain products are pronounced, and the annunciation. To see the machine actually learning those dialogue differences was super important to us," said Tony Colvin, Director – Paid Media, Albertsons Companies.
WAVE is launching into the Retail vertical, adding a richer, multi-dimensional capability to each consumer touchpoint. Perion plans to quickly roll out WAVE to additional verticals, including QSR - Quick-Service Restaurants, automotive, and travel.
Third Quarter 2023 Business Highlights
? Retail Media1 revenue increased 112% year-over-year to $13.0 million, representing 13% of Display Advertising revenue compared to 7% last year
? CTV revenue2 increased 39% year-over-year to $7.9 million, representing 8% of Display Advertising revenue compared to 7% last year
? Video revenue decreased 16% year-over-year, driven by shifting inventory from video to display to gain higher profit, representing 32% of Display Advertising revenue, compared to 44% last year
? The number of Average Daily Searches increased by 86% year-over-year to 31.3 million. The number of Search Advertising publishers increased by 16% year-over-year to 164
1 Retail Media revenue includes all media channels, such as CTV, video and others
2 Starting in the previous quarter, we changed our methodology for measuring our CTV activity. We moved from measuring CTV campaigns to measuring CTV channels. The CTV growth trend under both methodologies remains in the same trajectory. Under our updated methodology, revenue generated from CTV in the third quarter of 2022 was $5.7 million vs. $7.4 million under the previous methodology.
Third Quarter 2023 Financial Highlights1
In millions,
Three months ended
Nine months ended
except per share data
September 30,
September 30,
2023
2022
%
2023
2022
%
Display Advertising Revenue
$
99.2
$
86.8
14%
$
278.5
$
236.9
18%
Search Advertising Revenue
$
86.1
$
71.8
20%
$
230.5
$
193.7
19%
Total Revenue
$
185.3
$
158.6
17%
$
509
$
430.6
18%
Contribution ex-TAC (Revenue ex-TAC)1
$
77.3
$
65
19%
$
219.6
$
180
22%
GAAP Net Income
$
32.8
$
25.6
28%
$
78
$
60.5
29%
Non-GAAP Net Income1
$
42.4
$
29.9
42%
$
114.4
$
75.1
52%
Adjusted EBITDA1
$
42.7
$
33
29%
$
115.2
$
84.1
37%
Adjusted EBITDA to Revenue ex-TAC
55%
51%
52%
47%
Net Cash from Operations
$
40.1
$
34.7
16%
$
105.2
$
83.9
25%
GAAP Diluted EPS
$
0.65
$
0.53
23%
$
1.57
$
1.27
24%
Non-GAAP Diluted EPS1
$
0.84
$
0.61
38%
$
2.28
$
1.56
46%
Outlook for 2023 2
With the first three quarters of 2023 behind us, Perion reiterates its annual revenue and adjusted EBITDA guidance.
In millions
2022
2023
Guidance
YoY
Growth %3
Revenue
$640.3
$730-$750
16%
Adjusted EBITDA
$132.4
$167+
26%
Adjusted EBITDA to Revenue
21%
23%3
Adjusted EBITDA to Contribution ex-TAC
49%
54%3
1 Contribution ex-TAC, non-GAAP Net Income, Adjusted EBITDA and non-GAAP Diluted EPS are non-GAAP measures. See below reconciliation of GAAP to non-GAAP measures.
2 We have not provided an outlook for GAAP Income from operations or reconciliation of Adjusted EBITDA guidance to GAAP Income from operations, the closest corresponding GAAP measure, because we do not provide guidance for certain of the reconciling items on a consistent basis due to the variability and complexity of these items, including but not limited to the measures and effects of our stock-based compensation expenses directly impacted by unpredictable fluctuation in our share price and amortization in connection with future acquisitions. Hence, we are unable to quantify these amounts without unreasonable efforts.
3 Calculated at revenue guidance midpoint. Adjusted EBITDA year-over-year growth calculated based on $167 million.
Financial Comparison for the Third Quarter of 2023
Revenue: Revenue increased 17% to $185.3 million in the third quarter of 2023 from $158.6 million in the third quarter of 2022. Display Advertising revenue increased 14% year-over-year, accounting for 54% of total revenue, primarily due to a 112% year-over-year increase in Retail revenue to $13.0 million and a 39% year-over-year increase in CTV revenue to $7.9 million. Search Advertising revenue increased 20% year-over-year, accounting for 46% of revenue, with 86% increase in Average Daily Searches and 16% increase in the number of publishers.
Traffic Acquisition Costs and Media Buy ("TAC"): TAC amounted to $108.0 million, or 58% of revenue, in the third quarter of 2023, compared with $93.6 million, or 59% of revenue, in the third quarter of 2022. The margin expansion was primarily attributed to favorable product mix and media buying optimization through our platform.
GAAP Net Income: GAAP net income increased by 28% to $32.8 million in the third quarter of 2023 compared with $25.6 million in the third quarter of 2022.
Non-GAAP Net Income: Non-GAAP net income was $42.4 million, or 23% of revenue, in the third quarter of 2023, compared with $29.9 million, or 19% of revenue, in the third quarter of 2022. A reconciliation of GAAP to non-GAAP net income is included in this press release.
Adjusted EBITDA: Adjusted EBITDA was $42.7 million, or 23% of revenue (and 55% of Contribution ex-TAC) in the third quarter of 2023, compared with $33.0 million, or 21% of revenue (and 51% of Contribution ex-TAC) in the third quarter of 2022. A reconciliation of GAAP income from operations to Adjusted EBITDA is included in this press release.
Cash Flow from Operations: Net cash provided by operating activities in the third quarter of 2023 was $40.1 million, compared with $34.7 million in the third quarter of 2022.
Net cash: As of September 30, 2023, cash and cash equivalents, short-term bank deposits and marketable securities amounted to $523.6 million, compared with $429.6 million as of December 31, 2022.
Conference Call
Perion’s management will host a conference call to discuss the results at 8:30 a.m. ET today:
? Registration link:
https://incommconferencing.zoom.us/webinar/register/WN_Mwx-qMqNRZKyt3FCZ1XXxQ
? Toll Free: 1-877-407-0779
? Toll/International: 1-201-389-0914
A replay of the call and a transcript will be available within approximately 24 hours of the live event on Perion’s website.
About Perion Network Ltd.
Perion is a global multi-channel advertising technology company that delivers synergistic solutions across all major channels of digital advertising – including search advertising, social media, display, video and CTV advertising. These channels converge at Perion’s intelligent HUB (iHUB), which connects the company’s demand and supply assets, providing significant benefits to brands and publishers.
MrT11
1 year ago
Perion Delivers Strong Results with 22% Year-Over-Year Increase in Revenue and 45% Growth in Adjusted EBITDA
Wed, August 2, 2023 at 4:00 AM PDT
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PERI
-2.83%
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Company raises annual guidance – focusing on profitability
TEL AVIV & NEW YORK, August 02, 2023--(BUSINESS WIRE)--Perion Network Ltd. (NASDAQ and TASE: PERI), a global multi-channel advertising technology company that delivers synergistic solutions across all major channels of digital advertising – including search advertising, social media, display, video and CTV advertising – today reported its financial results for the second quarter ended June 30, 2023.
"Our business results demonstrate, once again, our consistent ability to outperform the industry. We accomplish that through focusing on profitability and margin expansion, driven by efficiency and innovation", stated Tal Jacobson, Perion’s CEO. "Our growth in second-quarter revenue and adjusted EBITDA - up 22% and 45% respectively - highlights our ability to identify and seize lucrative market segments with agility. Our diversification strategy, powered by exceptional execution and investment in technology, has formed the foundation of a business model built for growth."
Second Quarter 2023 Business Highlights
CTV revenue1 increased by 104% year-over-year to $7.2 million, representing 7% of Display Advertising revenue compared to 4% last year
Retail Media2 revenue increased by 63% year-over-year to $10.1 million, representing 10% of Display Advertising revenue compared to 8% last year
Video revenue increased by 14% year-over-year, representing 41% of Display Advertising revenue compared to 44% last year
The number of Average Daily Searches increased by 68% year-over-year to 28.6 million
The number of Search Advertising publishers increased by 28% year-over-year to 159
Revenue from Perion’s AI-based cookieless targeting solution, SORT®2, grew by 84% year-over-year, representing 21% of Display Advertising revenue compared to 14% last year.
1 Starting this quarter, we changed our methodology for measuring our CTV activity. We moved from measuring CTV campaigns to measuring CTV channels. The CTV growth trend under both methodologies remains in the same trajectory. Under our updated methodology, revenue generated from CTV in the second quarter of 2022 was $3.5 million vs. $5.1 million under the previous methodology; and in the first quarter of 2023 $3.9 million vs. $6.2 million.
2 Retail Media and SORT® revenue include all media channels, such as, CTV, video and others
Second Quarter 2023 Financial Highlights1
In millions,
except per share data
Three months ended
Six months ended
June 30,
June 30,
2023
2022
%
2023
2022
%
Display Advertising Revenue
$
99.4
$
81.6
+22%
$
179.3
$
150.2
+19%
Search Advertising Revenue
$
79.1
$
65.1
+21%
$
144.4
$
121.8
+19%
Total Revenue
$
178.5
$
146.7
+22%
$
323.6
$
272.0
+19%
Contribution Ex-TAC (Revenue Ex-TAC)
$
77.0
$
60.7
+27%
$
142.3
$
115.0
+24%
GAAP Net Income
$
21.4
$
19.5
+10%
$
45.2
$
35.0
+29%
Non-GAAP Net Income
$
42.1
$
24.5
+72%
$
72.0
$
45.2
+59%
Adjusted EBITDA
$
41.2
$
28.5
+45%
$
72.5
$
51.1
+42%
Adjusted EBITDA to Contribution Ex-TAC
54%
47%
51%
44%
Net Cash Provided by Operating Activities
$
47.4
$
25.7
+84%
$
65.2
$
49.3
+32%
GAAP Diluted EPS
$
0.43
$
0.41
+5%
$
0.91
$
0.74
+23%
Non-GAAP Diluted EPS
$
0.84
$
0.51
+65%
$
1.45
$
0.95
+53%
1 Contribution Ex-TAC, Non-GAAP Net Income, Adjusted EBITDA and Non-GAAP diluted EPS are non-GAAP measures. See below reconciliation of GAAP to non-GAAP measures.
Outlook for 20232
"We are encouraged by the strong results we achieved in the first half of 2023", commented Tal Jacobson, Perion’s CEO. "Consequently, we are raising our annual revenue and adjusted EBITDA guidance to reflect increased profitability and margin expansion".
In millions
2022
Prior 2023 Guidance
Current 2023 Guidance
YoY
Growth %1
Revenue
$640.3
$725-$745
$730-$750
16%
Adjusted EBITDA
$132.4
$155+
$167+
26%
Adjusted EBITDA to Revenue
21%
21%1
23%1
Adjusted EBITDA to Contribution Ex-TAC
49%
50%1
54%1
1 Calculated at revenue guidance midpoint. Adjusted EBITDA year-over-year growth calculated based on $167 million.
2 We have not provided an outlook for GAAP Income from operations or reconciliation of Adjusted EBITDA guidance to GAAP Income from operations, the closest corresponding GAAP measure, because we do not provide guidance for certain of the reconciling items on a consistent basis due to the variability and complexity of these items, including but not limited to the measures and effects of our stock-based compensation expenses directly impacted by unpredictable fluctuation in our share price and amortization in connection with future acquisitions. Hence, we are unable to quantify these amounts without unreasonable efforts.
Financial Comparison for the Second Quarter of 2023
Revenue: Revenue increased by 22% to $178.5 million in the second quarter of 2023 from $146.7 million in the second quarter of 2022. Display Advertising revenue increased 22% year-over-year, accounting for 56% of total revenue, primarily due to a 14% year-over-year increase in video revenue to $40.9 million and 104% year-over-year increase in CTV revenue to $7.2 million. Search Advertising revenue increased by 21% year-over-year, accounting for 44% of revenue, primarily due to a 68% increase in Average Daily Searches and a 28% increase in the number of publishers. RPM gradually increased in the second quarter compared to the first quarter of 2023.
Traffic Acquisition Costs and Media Buy ("TAC"): TAC amounted to $101.5 million, or 57% of revenue, in the second quarter of 2023, compared with $86.0 million, or 59% of revenue, in the second quarter of 2022. The margin expansion was primarily due to improved product mix in addition to media buying optimization, enabled by leveraging data and buying power.
GAAP Net Income: GAAP net income increased by 10% to $21.4 million in the second quarter of 2023 from $19.5 million in the second quarter of 2022. GAAP net income in the second quarter of 2023 includes a $14.6 million fair-value adjustment of the contingent consideration payable in respect to the Vidazoo acquisition due to overachievement and an amendment to the share purchase agreement entered into effect this quarter as a result of their outstanding performance.
Non-GAAP Net Income: Non-GAAP net income was $42.1 million, or 24% of revenue, in the second quarter of 2023, compared with $24.5 million, or 17% of revenue, in the second quarter of 2022. A reconciliation of GAAP to non-GAAP net income is included in this press release.
Adjusted EBITDA: Adjusted EBITDA was $41.2 million, or 23% of revenue (and 54% of Contribution Ex-TAC) in the second quarter of 2023, compared with $28.5 million, or 19% of revenue (and 47% of Contribution Ex-TAC) in the second quarter of 2022. A reconciliation of GAAP income from operations to Adjusted EBITDA is included in this press release.
Cash Flow from Operations: Net cash provided by operating activities in the second quarter of 2023 was $47.4 million, compared with $25.7 million in the second quarter of 2022.
Net cash: As of June 30, 2023, cash and cash equivalents, short-term bank deposits and marketable securities amounted to $483.3 million, compared with $429.6 million as of December 31, 2022.
Conference Call
Perion’s management will host a conference call to discuss the results at 8:30 a.m. ET today:
Registration link:
https://incommconferencing.zoom.us/webinar/register/WN_xMvsgXNoSAyrwYE3yNKUcA#/registration
Toll Free: 1-877-407-0779
Toll/International: 1-201-389-0914
A replay of the call and a transcript will be available within approximately 24 hours of the live event on Perion’s website.
About Perion Network Ltd.
Perion is a global multi-channel advertising technology company that delivers synergistic solutions across all major channels of digital advertising – including search advertising, social media, display, video and CTV advertising. These channels converge at Perion’s intelligent HUB (iHUB), which connects the company’s demand and supply assets, providing significant benefits to brands and publishers.
For more information, visit Perion's website at www.perion.com.
Non-GAAP Measures
Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude certain items. This press release includes certain non-GAAP measures, including Contribution Ex-TAC, Adjusted EBITDA, Non-GAAP net income and Non-GAAP earning per share.
Contribution Ex-TAC presents revenue reduced by traffic acquisition costs and media buy, reflecting a portion of our revenue that must be directly passed to publishers or advertisers and presents our revenue excluding such items. We believe Contribution Ex-TAC is a useful measure in assessing the performance of the Company because it facilitates a consistent comparison against our core business without considering the impact of traffic acquisition costs and media buy related to revenue reported on a gross basis.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") is defined as income from operations excluding stock-based compensation expenses, depreciation, amortization of acquired intangible assets, retention and other acquisition-related expenses and gains and losses recognized with respect to changes in the fair value of contingent consideration.
Non-GAAP net income and Non-GAAP earnings per share are defined as net income and net earnings per share excluding stock-based compensation expenses, retention and other acquisition-related expenses, revaluation of acquisition-related contingent consideration, amortization of acquired intangible assets and the related taxes thereon, non-recurring expenses, foreign exchange gains and losses associated with ASC-842, as well as gains and losses recognized with respect to changes in fair value of contingent consideration.
The purpose of such adjustments is to give an indication of our performance exclusive of non-cash charges and other items that are considered by management to be outside of our core operating results. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Furthermore, the non-GAAP measures are regularly used internally to understand, manage and evaluate our business and make operating decisions, and we believe that they are useful to investors as a consistent and comparable measure of the ongoing performance of our business. However, our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these projected measures, together with some of the excluded information not being ascertainable or accessible, we are unable to quantify certain amounts that would be required for such presentation without unreasonable effort. Consequently, no reconciliation of the forward-looking non-GAAP financial measures is included in this press release. A reconciliation between results on a GAAP and non-GAAP basis is provided in the last table of this press release.
Forward Looking Statements
This press release contains historical information and forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 with respect to the business, financial condition and results of operations of Perion. The words "will," "believe," "expect," "intend," "plan," "should", "estimate" and similar expressions are intended to identify forward-looking statements. Such statements reflect the current views, assumptions and expectations of Perion with respect to future events and are subject to risks and uncertainties. Many factors could cause the actual results, performance or achievements of Perion to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, or financial information, including, but not limited to, the failure to realize the anticipated benefits of companies and businesses we acquired and may acquire in the future, risks entailed in integrating the companies and businesses we acquire, including employee retention and customer acceptance; the risk that such transactions will divert management and other resources from the ongoing operations of the business or otherwise disrupt the conduct of those businesses, potential litigation associated with such transactions, and general risks associated with the business of Perion including intense and frequent changes in the markets in which the businesses operate and in general economic and business conditions, loss of key customers, unpredictable sales cycles, competitive pressures, market acceptance of new products, changes in applicable laws and regulations as well as industry self-regulation, data breaches, cyber-attacks and other similar incidents, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, whether referenced or not referenced in this press release. Various other risks and uncertainties may affect Perion and its results of operations, as described in reports filed by Perion with the Securities and Exchange Commission from time to time, including its annual report on Form 20-F for the year ended December 31, 2022 filed with the SEC on March 15, 2023. Perion does not assume any obligation to update these forward-looking statements.
PERION NETWORK LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
In thousands (except share and per share data)
Three months ended
Six months ended
June 30,
June 30,
2023
2022
2023
2022
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Revenue
Display Advertising
$ 99,379
$ 81,551
$ 179,257
$ 150,154
Search Advertising
79,091
65,105
144,363
121,817
Total Revenue
178,470
146,656
323,620
271,971
Costs and Expenses
Cost of revenue
9,589
6,861
17,148
13,474
Traffic acquisition costs and media buy
101,482
85,956
181,357
156,930
Research and development
8,236
8,336
16,589
17,369
Selling and marketing
13,857
13,955
28,812
27,293
General and administrative
7,413
6,468
13,956
12,134
Changes in fair value of contingent consideration
14,602
-
14,602
-
Depreciation and amortization
3,405
3,208
6,766
6,393
Total Costs and Expenses
158,584
124,784
279,230
233,593
Income from Operations
19,886
21,872
44,390
38,378
Financial income, net
5,158
903
8,586
1,507
Income before Taxes on income
25,044
22,775
52,976
39,885
Taxes on income
3,638
3,275
7,785
4,919
Net Income
$ 21,406
$ 19,500
$ 45,191
$ 34,966
Net Earnings per Share
Basic
$ 0.46
$ 0.44
$ 0.97
$ 0.79
Diluted
$ 0.43
$ 0.41
$ 0.91
$ 0.74
Weighted average number of shares
Basic
46,961,028
44,439,023
46,673,439
44,238,414
Diluted
49,637,258
47,292,249
49,551,061
47,210,769
PERION NETWORK LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands
June 30,
December 31,
2023
2022
(Unaudited)
(Audited)
ASSETS
Current Assets
Cash and cash equivalents
$ 185,928
$ 176,226
Restricted cash
1,315
1,295
Short-term bank deposits
225,300
253,400
Accounts receivable, net
140,734
160,488
Prepaid expenses and other current assets
18,947
12,049
Marketable Securities
72,090
-
Total Current Assets
644,314
603,458
Long-Term Assets
Property and equipment, net
3,181
3,611
Operating lease right-of-use assets
8,318
10,130
Goodwill and intangible assets, net
241,235
247,191
Deferred taxes
6,414
5,779
Other assets
52
49
Total Long-Term Assets
259,200
266,760
Total Assets
$ 903,514
$ 870,218
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable
$ 145,639
$ 155,854
Accrued expenses and other liabilities
29,861
37,869
Short-term operating lease liability
3,920
3,900
Deferred revenue
1,978
2,377
Short-term payment obligation related to acquisitions
69,333
34,608
Total Current Liabilities
250,731
234,608
Long-Term Liabilities
Payment obligation related to acquisition
-
33,113
Long-term operating lease liability
5,480
7,580
Other long-term liabilities
10,811
11,783
Total Long-Term Liabilities
16,291
52,476
Total Liabilities
267,022
287,084
Shareholders' equity
Ordinary shares
405
398
Additional paid-in capital
522,217
513,534
Treasury shares at cost
(1,002)
(1,002)
Accumulated other comprehensive loss
(1,105)
(582)
Retained earnings
115,977
70,786
Total Shareholders' Equity
636,492
583,134
Total Liabilities and Shareholders' Equity
$ 903,514
$ 870,218
PERION NETWORK LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
In thousands
Three months ended
Six months ended
June 30,
June 30,
2023
2022
2023
2022
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Cash flows from operating activities
Net Income
$ 21,406
$ 19,500
$ 45,191
$ 34,966
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
3,405
3,208
6,766
6,393
Stock-based compensation expenses
3,100
2,701
6,502
5,129
Foreign currency translation
(11)
(128)
(13)
(174)
Accrued interest, net
2,150
(639)
(2,031)
(1,181)
Deferred taxes, net
(554)
(44)
(476)
(248)
Accrued severance pay, net
(1,873)
409
(275)
503
Gain from sale of property and equipment
(5)
(6)
(17)
(6)
Net change in operating assets and liabilities
19,754
720
9,504
3,893
Net cash provided by operating activities
$ 47,372
$ 25,721
$ 65,151
$ 49,275
Cash flows from investing activities
Purchases of property and equipment, net of sales
(217)
(177)
(351)
(429)
Marketable securities, net
(20,789)
-
(72,195)
-
Short-term deposits, net
26,000
(1,000)
28,100
(33,400)
Cash paid in connection with acquisitions, net of cash acquired
-
(6,170)
-
(9,570)
Net cash provided by (used in) investing activities
$ 4,994
$ (7,347)
$ (44,446)
$ (43,399)
Cash flows from financing activities
Proceeds from exercise of stock-based compensation
125
346
2,188
1,294
Payments of contingent consideration
-
(9,091)
(13,256)
(9,091)
Net cash provided by (used in) financing activities
$ 125
$ (8,745)
$ (11,068)
$ (7,797)
Effect of exchange rate changes on cash and cash equivalents and restricted cash
8
(147)
85
(177)
Net increase (decrease) in cash and cash equivalents and restricted cash
52,499
9,482
9,722
(2,098)
Cash and cash equivalents and restricted cash at beginning of period
134,744
93,955
177,521
105,535
Cash and cash equivalents and restricted cash at end of period
$ 187,243
$ 103,437
$ 187,243
$ 103,437
PERION NETWORK LTD. AND ITS SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
In thousands
Three months ended
Six months ended
June 30,
June 30,
2023
2022
2023
2022
(Unaudited)
(Unaudited)
Total Revenue
$ 178,470
$ 146,656
$ 323,620
$ 271,971
Traffic acquisition costs and media buy
101,482
85,956
181,357
156,930
Contribution Ex-TAC
$ 76,988
$ 60,700
$ 142,263
$ 115,041
Three months ended
Six months ended
June 30,
June 30,
2023
2022
2023
2022
(Unaudited)
(Unaudited)
GAAP Income from Operations
$ 19,886
$ 21,872
$ 44,390
$ 38,378
Stock-based compensation expenses
3,100
2,701
6,502
5,129
Retention and other acquisition-related expenses
250
679
257
1,230
Changes in fair value of contingent consideration
14,602
-
14,602
-
Amortization of acquired intangible assets
2,992
2,812
5,955
5,601
Depreciation
413
396
811
792
Adjusted EBITDA
$ 41,243
$ 28,460
$ 72,517
$ 51,130
PERION NETWORK LTD. AND ITS SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
In thousands (except share and per share data)
Three months ended
Six months ended
June 30,
June 30,
2023
2022
2023
2022
(Unaudited)
(Unaudited)
GAAP Net Income
$ 21,406
$ 19,500
$ 45,191
$ 34,966
Stock-based compensation expenses
3,100
2,701
6,502
5,129
Amortization of acquired intangible assets
2,992
2,812
5,955
5,601
Retention and other acquisition-related expenses
250
679
257
1,230
Changes in fair value of contingent consideration
14,602
-
14,602
-
Foreign exchange losses (gains) associated with ASC-842
(81)
(548)
(198)
(745)
Revaluation of acquisition-related contingent consideration
147
129
292
261
Taxes on the above items
(289)
(771)
(574)
(1,212)
Non-GAAP Net Income
$ 42,127
$ 24,502
$ 72,027
$ 45,230
Non-GAAP diluted earnings per share
$ 0.84
$ 0.51
$ 1.45
$ 0.95
Shares used in computing non-GAAP diluted earnings per share
49,922,156
47,906,671
49,832,074
47,744,781
View source version on businesswire.com: https://www.businesswire.com/news/home/20230802202555/en/
Contacts
Perion Network Ltd.
Dudi Musler, VP of Investor Relations
+972 (54) 7876785
dudim@perion.com
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