Display and social advertising activity was
main driver with 61% year-over-year revenues growth,
Company Increases Full-Year 2021 revenues
guidance: midpoint represents 22% annual growth
Perion Network Ltd. (NASDAQ: PERI), a global advertising
technology company that delivers holistic solutions across the
three main pillars of digital advertising – ad search, social media
and display / video / CTV advertising – announced today its
financial results for the first quarter ended March 31, 2021.
First Quarter 2021
Highlights
- CTV solution served as a key factor for new customer
acquisition and primary contributor to 11% increase in average deal
size;
- Average daily searches increased 45% year-over-year from 12.2
million in the first quarter of 2020 to a record 17.7 million this
quarter;
- Perion’s Actionable Performance Monitoring (APM) SaaS system
for social advertisement has already been chosen by 7 new customers
since launched in January 2021;
- Net cash was $128.0 million compared to $52.0 million on
December 31, 2020; and
- Outstanding debt was fully repaid during the first quarter of
2021.
First Quarter 2021 Results Summary*
(In millions, except per share data)
Three months ended
March 31,
2021
2020
%
Display and Social Advertising
revenues
$
38.1
$
23.7
+61%
Search Advertising and other
revenues
$
51.7
$
42.3
+22%
Total Revenues
$
89.8
$
66.1
+36%
GAAP Net Income
$
3.3
$
1.3
+148%
Non-GAAP Net Income
$
7.0
$
5.0
+41%
Adjusted EBITDA
$
8.8
$
6.2
+41%
Net cash provided by operating
activities
$
13.5
$
2.5
+440%
GAAP Diluted Earnings Per
Share
$
0.09
$
0.05
+80%
Non-GAAP Diluted Earnings Per
Share
$
0.19
$
0.17
+12%
* Reconciliation of GAAP to Non-GAAP measures follows.
Doron Gerstel, Perion’s CEO, commented, “Our diversified
cross-channel offering and our unique capability to generate
revenues from both the demand and supply sides of the open
internet, were key factors to the accelerating revenues growth
which began in 2020. Our strong momentum continued in the first
quarter as we achieved a 36% increase in consolidated revenues,
with Display and Social Advertising revenues increasing 61%
year-over-year. Importantly, we achieved this while maintaining our
strong profitability metrics and positive cash generation.”
Mr. Gerstel added “With continued momentum and strong adoption
of our technology, we are raising our full-year revenues outlook to
$400 million at the mid-point, representing second consecutive year
with annual growth of more than 20%. We are also reaffirming our
strategy to deliver substantial value to our stakeholders and
achieving our 2023 goal of $500 million in annual revenues sooner
than originally anticipated.”
Financial Comparison for the First Quarter of 2021
Revenues: Revenues increased by 36% (or 26% on a pro
forma basis), from $66.1 million in the first quarter of 2020 to
$89.8 million in the first quarter of 2021. This increase was
primarily attributable to a 61% (or 32% on a pro forma basis),
increase in Display and Social Advertising revenues, mainly from
the CTV solution which served as a key driver to 11% higher average
deal size, as well as accelerated growth in revenues from our
Content Monetization solution which has been adopted by 3 new
publishers during the first quarter of 2021. Search Advertising and
other revenues increased by 22%, primarily due to a record 17.7
million of average daily monetizable search queries we delivered to
Microsoft Bing compared to 12.2 million in the first quarter of
2020 and increased number of new publishers.
Customer Acquisition Costs (“CAC”): CAC in the first
quarter of 2021 were $54.9 million, or 61% of revenues, compared to
$36.1 million, or 55% of revenues, in the first quarter of 2020.
The increase as a percentage of revenues is primarily due to the
acquisition of Pub Ocean and product mix.
Net Income: On a GAAP basis, net income increased by 148%
from $1.3 million in the first quarter of 2020 to $3.3 million in
the first quarter of 2021.
Non-GAAP Net Income: In the first quarter of 2021,
non-GAAP net income was $7.0 million, or 8% of revenues, compared
to the $5.0 million, or 8% of revenues in the first quarter of
2020. A reconciliation of GAAP to non-GAAP net income is included
in this press release.
Adjusted EBITDA: In the first quarter of 2021, Adjusted
EBITDA was $8.8 million, or 10% of revenues, compared to $6.2
million, or 9% of revenues, in the first quarter of 2020. A
reconciliation of GAAP Net Income to Adjusted EBITDA is included in
this press release.
Cash and Cash Flow from Operations: As of March 31, 2021,
cash and cash equivalents and short-term bank deposits were $128.0
million. Cash provided from operations in the first quarter of 2021
was $13.5 million, compared to $2.5 million in the first quarter of
2020. During the first quarter of 2021, Perion raised $61 million
through a follow-on public offering.
Short-Term Debt, Long-term Debt and Convertible Debt: As
of March 31, 2021, Perion has fully repaid all outstanding
debt.
Outlook
Based on the strong first quarter and management’s outlook for
the remainder of the year, Perion increases its full-year guidance.
In 2021, management expects to generate revenues of $390 million to
$410 million and Adjusted EBITDA of $39 million to $41 million,
versus prior guidance of $370 million to $380 million and $37
million to $38 million, respectively.
Conference Call
Perion will host a conference call to discuss the results today,
Tuesday, May 4, 2021 at 8:30 a.m. ET. Details are as follows:
- Conference ID: 1398309
- Dial-in number from within the United States:
1-800-289-0438
- Dial-in number from Israel: 1809 212 883
- Dial-in number (other international): 1-323-794-2423
- Playback available until May 11, 2021 by calling 1-844-512-2921
(United States) or 1-412-317-6671 (international). Please use PIN
code 1398309 for the replay.
- Link to the live and archived webcast accessible at
https://www.perion.com/investors/
About Perion Network Ltd.
Perion is a global technology company that delivers holistic
strategic business solutions that enable brands and advertisers to
efficiently “Capture and Convince” users across multiple platforms
and channels, including interactive connected television – or iCTV.
Perion achieves this through its Synchronized Digital Branding
capabilities, which are focused on high impact creative; content
monetization; its branded search network, in partnership with
Microsoft Bing; and social media management that orchestrates and
optimizes paid advertising. This diversification positions Perion
for growth as budgets shift across categories.
Non-GAAP measures
Non-GAAP financial measures consist of GAAP financial measures
adjusted to exclude share-based compensation expenses, retention
and acquisition related expenses, revaluation of acquisition
related contingent consideration, impairment of goodwill,
amortization and impairment of acquired intangible assets and the
related taxes thereon, non-recurring expenses, foreign exchange
gains (losses) associated with ASC-842, as well as certain
accounting entries under the business combination accounting rules
that require us to recognize a legal performance obligation related
to revenues arrangements of an acquired entity based on its fair
value at the date of acquisition. Adjusted Earnings Before
Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”)
is defined as operating income excluding stock-based compensation
expenses, depreciation, restructuring costs, acquisition related
items consisting of amortization of intangible assets and goodwill
and intangible asset impairments, acquisition related expenses,
gains and losses recognized on changes in the fair value of
contingent consideration arrangements and certain accounting
entries under the business combination accounting rules that
require us to recognize a legal performance obligation related to
revenues arrangements of an acquired entity based on its fair value
at the date of acquisition.
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. 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”
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,
among others, 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, 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, 2020 filed with the SEC on March 25, 2021. Perion does
not assume any obligation to update these forward-looking
statements.
Three months ended
March 31,
2021
2020
(Unaudited)
(Unaudited)
Revenues:
Display and Social
Advertising
$ 38,137
$ 23,733
Search Advertising and other
51,680
42,320
Total Revenues
89,817
66,053
Costs and Expenses:
Cost of revenues
5,436
5,766
Customer acquisition costs and
media buy
54,860
36,138
Research and development
8,545
7,207
Selling and marketing
10,605
9,701
General and administrative
4,131
3,939
Depreciation and amortization
2,377
2,302
Total Costs and
Expenses
85,954
65,053
Income from Operations
3,863
1,000
Financial income, net
193
8
Income before Taxes on
income
4,056
1,008
Taxes on income (benefit)
750
(326)
Net Income
$ 3,306
$ 1,334
Net Earnings per Share
Basic
$ 0.10
$ 0.05
Diluted
$ 0.09
$ 0.05
Weighted average number of
shares
Basic
32,147,176
26,287,515
Diluted
35,820,634
28,212,685
March 31,
December 31,
2021
2020
(Unaudited)
(Audited)
ASSETS
Current Assets:
Cash and cash equivalents
$ 71,999
$ 47,656
Restricted cash
1,222
1,222
Short-term bank deposits
56,000
12,700
Accounts receivable, net
55,644
81,221
Prepaid expenses and other
current assets
5,906
4,560
Total Current Assets
190,771
147,359
Long-Term Assets:
Property and equipment, net
5,873
6,770
Operating lease right-of-use
assets
18,907
20,266
Goodwill and intangible assets,
net
175,337
176,679
Deferred taxes
6,840
7,111
Other assets
461
496
Total Long-Term Assets
207,418
211,322
Total Assets
$ 398,189
$ 358,681
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities:
Accounts payable
$ 60,684
$ 72,498
Accrued expenses and other
liabilities
16,600
21,188
Short-term operating lease
liability
4,358
4,514
Short-term loans and current
maturities of long-term loans
-
8,333
Deferred revenues
5,125
5,711
Short-term payment obligation
related to acquisitions
30,986
7,869
Total Current
Liabilities
117,753
120,113
Long-Term Liabilities:
Payment obligation related to
acquisition
6,810
30,035
Long-term operating lease
liability
16,245
17,698
Other long-term liabilities
6,729
6,713
Total Long-Term
Liabilities
29,784
54,446
Total Liabilities
147,537
174,559
Shareholders' equity:
Ordinary shares
282
224
Additional paid-in capital
315,291
251,933
Treasury shares at cost
(1,002)
(1,002)
Accumulated other comprehensive
gain
(80)
112
Accumulated deficit
(63,839)
(67,145)
Total Shareholders'
Equity
250,652
184,122
Total Liabilities and
Shareholders' Equity
$ 398,189
$ 358,681
Three months ended
March 31,
2021
2020
(Unaudited)
(Unaudited)
Cash
flows from operating activities:
Net Income
$ 3,306
$ 1,334
Adjustments required to reconcile
net income to net cash provided by operating activities:
Depreciation and amortization
2,377
2,302
Stock based compensation
expense
755
1,100
Foreign currency translation
(120)
(29)
Accrued interest, net
(75)
-
Deferred taxes, net
236
(315)
Accrued severance pay, net
109
25
Net changes in operating assets
and liabilities
6,883
(1,921)
Net cash provided by operating
activities
$ 13,471
$ 2,496
Cash
flows from investing activities:
Purchases of property and
equipment
(144)
(71)
Short-term deposits, net
(43,300)
15,486
Cash paid in connection with
acquisitions, net of cash acquired
-
(15,100)
Obligation in connection with
acquisitions
-
5,777
Net cash provided by (used in)
investing activities
$ (43,444)
$ 6,092
Cash
flows from financing activities:
Issuance of shares in private
placement, net
60,960
-
Exercise of stock options and
restricted share units
1,701
1,557
Repayment of short-term loans
(8,333)
(2,083)
Net cash provided by (used in)
financing activities
$ 54,328
$ (526)
Effect of exchange rate changes
on cash and cash equivalents and restricted cash
(12)
(73)
Net increase in cash and cash
equivalents and restricted cash
24,343
7,989
Cash and cash equivalents and
restricted cash at beginning of period
48,878
39,605
Cash and cash equivalents and
restricted cash at end of period
$ 73,221
$ 47,594
Three months ended
March 31,
2021
2020
(Unaudited)
GAAP Net Income
$ 3,306
$ 1,334
Share based compensation
755
1,100
Amortization of acquired
intangible assets
1,342
1,065
Retention and other related to
M&A related expenses
1,788
1,836
Foreign exchange income
associated with ASC-842
(318)
(280)
Revaluation of acquisition
related contingent consideration
169
-
Taxes on the above items
(51)
(90)
Non-GAAP Net Income
$ 6,991
$ 4,965
Non-GAAP Net Income
$ 6,991
$ 4,965
Taxes on income
801
(236)
Financial expense, net
(44)
272
Depreciation
1,035
1,237
Adjusted EBITDA
$ 8,783
$ 6,238
Non-GAAP diluted earnings per
share
$ 0.19
$ 0.17
Shares used in computing
non-GAAP diluted earnings per share
36,122,783
28,749,160
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210504005667/en/
Perion Network Ltd. Rami Rozen, VP of Investor Relations +972
(52) 5694441 ramir@perion.com
Perion Network (NASDAQ:PERI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Perion Network (NASDAQ:PERI)
Historical Stock Chart
From Jul 2023 to Jul 2024