2022 revenue increased by 34% year-over-year,
net income grew by 156% to $99 million; diluted EPS doubled to
$2.06 and adjusted EBITDA increased by 90% to $132 million
Perion names Tal Jacobson as Chief Executive
Officer to succeed Doron Gerstel effective August 1st, 2023
Perion Network Ltd. (NASDAQ & TASE: PERI), a global
advertising technology company whose synergistic solutions are
delivered across the three primary channels of digital advertising
– ad search, social media and display/video/CTV advertising – today
reported record financial results for the fourth quarter and full
year period ending December 31, 2022.
“Perion operates in a dynamic digital advertising market, and
our strong financial performance is a clear indication of our
unique capability to identify shifts in ad spending, delivering the
right solutions at the right time,” said Doron Gerstel, Perion’s
CEO. “A three-year EBITDA CAGR of 101% and revenue CAGR of 40%
demonstrates the high level of predictability and sustainability of
our business model, underpinned by our diversification and
profitability-biased strategy. By connecting all our data assets
across all media channels on both sides of the open web into an
intelligent central hub (iHUB), we’re able to rapidly analyze
changes in consumer behavior and shift our business to where media
budgets are trending, while consistently delivering superior return
on advertising spend to our clients and increasing our profit
margins.”
“I’d like to stress that the consistency of our performance over
the past three years is even more impressive when you consider the
unprecedented volatility presented by the global pandemic, supply
chain distortions, interest rate increases, and the resultant
emotional swings among advertisers and brands,” added Mr.
Gerstel.
Full-Year 2022 Business Highlights
- Video revenue increased by 129%, representing 43% of Display
Advertising revenue
- CTV revenue increased by 108% year-over-year
- 59% of our agencies and brand customers adopted our SORT™
solution, and generated $59.4 million
- Customer retention rate of 115%
- Media margin increased to 42% compared with 40% in 2021
- The number of publishers increased by 27% year-over-year to
265
- Average daily searches increased by 11% and average RPM
increased by 21% year-over-year
Fourth Quarter 2022 Business Highlights
- Video revenue increased by 33% year-over-year, representing 42%
of Display Advertising revenue
- CTV revenue increased by 42% year-over-year
- Increased adoption of our holistic Video Platform solution
continues to deliver strong results:
- 72% year-over-year increase in the number of Video Platform
publishers
- 78% year-over-year increase in revenue from existing Video
Platform publishers
- Media margin increased to 42% compared with 41% in the fourth
quarter of 2021
- Average daily searches increased by 26% and average RPM
increased by 13% year-over-year
Fourth Quarter 2022 Financial Highlights(1)
In millions, except per share
data
Three months ended
Year ended
December 31,
December 31,
2022
2021
%
2022
2021
%
Display Advertising Revenue
$
123.8
$
100.2
+24%
$
360.7
$
265.3
+36%
Search Advertising Revenue
$
85.9
$
57.8
+49%
$
279.6
$
213.2
+31%
Total Revenue
$
209.7
$
158.0
+33%
$
640.3
$
478.5
+34%
GAAP Net Income
$
38.7
$
17.7
+119%
$
99.2
$
38.7
+156%
Non-GAAP Net Income
$
44.7
$
25.3
+77%
$
119.8
$
60.0
+100%
Adjusted EBITDA
$
48.2
$
28.9
+67%
$
132.4
$
69.6
+90%
Adjusted EBITDA to Revenue
ex-TAC
55%
45%
49%
37%
Net Cash from Operations
$
38.2
$
28.8
+32%
$
122.1
$
71.1
+72%
GAAP Diluted EPS
$
0.79
$
0.44
+80%
$
2.06
$
1.02
+102%
Non-GAAP Diluted EPS
$
0.90
$
0.62
+45%
$
2.47
$
1.57
+57%
(1) See below reconciliation of
GAAP to Non-GAAP measures
Outlook for 2023
Mr. Gerstel concluded, “We expect the strong business momentum
to carry on in 2023. We will continue to execute our strategy,
harnessing our innovative capabilities and our efficiency measures
to further drive growth and high profitability.”
In millions
2022
2023 Guidance
YoY
Growth %1
Revenue
$640.3
$720-$740
14%1
Adjusted EBITDA
$132.4
$149-$153
14%1
Adjusted EBITDA to Revenue
21%
21%1
Adjusted EBITDA to Revenue
ex-TAC
49%
50%1
(1) Calculated at guidance
midpoint
Financial Comparison for the Full-Year of 2022
Revenue: Revenue increased by 34% to $640.3 million in
2022 from $478.5 million in 2021. Display Advertising revenue
increased by 36%, accounting for 56% of revenue, mainly driven by
129% growth in video revenue, 108% growth in CTV revenue and 4%
increase in the number of agencies and brand customers. Search
Advertising revenue increased by 31%, accounting for 44% of
revenue, primarily due to a 21% increase in RPM and 11% increase in
average daily searches.
Traffic Acquisition Costs (“TAC”): TAC amounted to $372.6
million, or 58% of revenue, compared with $288.0 million, or 60% of
revenue, in 2021. The improvement in media margin was primarily due
to a favorable product mix and our ability to connect the supply
and demand sides of the marketplace, bringing Perion and its
client’s significant efficiencies.
Net Income: On a GAAP basis, net income increased by 156%
to $99.2 million in 2022 from $38.7 million in 2021. Non-GAAP net
income was $119.8 million, or 19% of revenue, compared with $60.0
million, or 13% of revenue in 2021. A reconciliation of GAAP to
non-GAAP net income is included in this press release.
Adjusted EBITDA: Adjusted EBITDA was $132.4 million, or
21% of revenue (and 49% of revenue ex-TAC), compared with $69.6
million, or 15% of revenue (and 37% of revenue ex-TAC) in 2021. A
reconciliation of GAAP Net Income to Adjusted EBITDA is included in
this press release.
Cash and Cash Flow from Operations: As of December 31,
2022, cash and cash equivalents and short-term bank deposits
amounted to $429.6 million. Net cash provided by operating
activities in 2022 was $122.1 million, a 72% increase compared with
$71.7 million in 2021.
Financial Comparison for the Fourth Quarter of 2022
Revenue: Revenue increased by 33% to $209.7 million in
the fourth quarter of 2022 from $158.0 million in the fourth
quarter of 2021. Display Advertising revenue increased by 24%,
accounting for 59% of total revenue, mainly driven by 33% growth in
video revenue, 42% growth in CTV revenue and 11% increase in the
number of agencies and brand customers. Search Advertising revenue
increased by 49% year-over-year, accounting for 41% of revenue,
primarily due to a 13% increase in RPM and a 26% increase in
average daily searches.
Traffic Acquisition Costs (“TAC”): TAC amounted to $122
million, or 58% of revenue in the fourth quarter of 2022, compared
with $93.3 million, or 59% of revenue, in the fourth quarter of
2021. The improvement in media margin was primarily due to a
favorable product mix and our ability to connect the supply and
demand sides of the marketplace, bringing Perion and its client’s
significant efficiencies .
Net Income: On a GAAP basis, net income increased by 119%
to $38.7 million in the fourth quarter of 2022 from $17.7 million
in the fourth quarter of 2021. Non-GAAP net income was $44.7
million, or 21% of revenue, compared with $25.3 million, or 16% of
revenue, in the fourth quarter of 2021. A reconciliation of GAAP to
non-GAAP net income is included in this press release.
Adjusted EBITDA: Adjusted EBITDA was $48.2 million, or
23% of revenue (and 55% of revenue ex-TAC), compared with $28.9
million, or 18% of revenue (and 45% of revenue ex-TAC) in the
fourth quarter of 2021. A reconciliation of GAAP Net Income to
Adjusted EBITDA is included in this press release.
Cash and Cash Flow from Operations: Net cash provided by
operating activities in the fourth quarter of 2022 was $38.2
million, a 32% increase compared with $28.8 million in the fourth
quarter of 2021.
Conference Call
Perion will host a conference call to discuss the results at
8:30 a.m. ET today. A replay and a transcript will be available
within approximately 24 hours of the live event on Perion’s
website.
Call details:
- Registration link:
https://incommconferencing.zoom.us/webinar/register/WN_vJ4RsH17Ru26T5usdgVv9A
- Toll Free: 1-877-407-0779
- Toll/International: 1-201-389-0914
CEO Transition
As disclosed earlier today, Perion has announced that Tal
Jacobson will succeed Doron Gerstel as CEO on August 1, 2023.
Additional information can be found in a press release at
https://www.perion.com/investors/press-releases/
About Perion Network Ltd.
Perion is a global advertising technology company whose
synergistic solutions are delivered across the three primary
channels of digital advertising – ad search, social media and
display / video / CTV advertising. These channels are brought
together by Perion’s intelligent Hub, which integrates the
company’s business assets from both sides of the open Web,
providing significant benefit to its brands and publisher
customers.
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 stock-based compensation expenses, retention
and 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 (losses) associated with ASC-842,
as well as changes in fair value of earnout contingent
consideration. Adjusted Earnings Before Interest, Taxes,
Depreciation and Amortization ("Adjusted EBITDA") is defined as
operating income excluding stock-based compensation expenses,
depreciation, acquisition related items consisting of amortization
of intangible assets, acquisition related expenses, gains and
losses recognized on changes in the fair value of contingent
consideration arrangements. Revenue excluding Traffic Acquisition
Costs (“Revenue ex-TAC”) presents revenue reduced by traffic
acquisition costs, reflecting that a portion of our revenue must be
directly passed to publishers or advertisers and presents our
revenue excluding such items.
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. 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, 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, 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, 2021 filed with the
SEC on March 16, 2022. 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
Year ended
December 31,
December 31,
2022
2021
2022
2021
(Unaudited)
(Unaudited)
(Unaudited)
(Audited)
Revenue:
Display Advertising
$ 123,757
$ 100,177
$ 360,690
$ 265,323
Search Advertising
85,913
57,798
279,566
213,175
Total Revenue
209,670
157,975
640,256
478,498
Costs and Expenses:
Cost of revenue
9,390
7,318
30,404
25,197
Traffic acquisition costs and
media buy
122,046
93,342
372,601
288,018
Research and development
9,289
9,245
34,424
35,348
Selling and marketing
16,130
16,799
56,014
53,209
General and administrative
7,886
6,878
23,813
20,933
Depreciation and amortization
3,741
3,598
13,838
9,897
Total Costs and
Expenses
168,482
137,180
531,094
432,602
Income from Operations
41,188
20,795
109,162
45,896
Financial expense (income),
net
(1,976)
465
(4,502)
581
Income before Taxes on
income
43,164
20,330
113,664
45,315
Taxes on income
4,487
2,635
14,439
6,609
Net Income
$ 38,677
$ 17,695
$ 99,225
$ 38,706
Net Earnings per Share
Basic
$ 0.84
$ 0.48
$ 2.21
$ 1.13
Diluted
$ 0.79
$ 0.44
$ 2.06
$ 1.02
Weighted average number of
shares
Basic
45,842,833
36,768,367
44,871,149
34,397,134
Diluted
48,872,169
40,349,416
48,071,638
37,829,725
PERION NETWORK LTD. AND ITS
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS In
thousands
December 31,
December 31,
2022
2021
(Unaudited)
(Audited)
ASSETS
Current Assets:
Cash and cash equivalents
$ 176,226
$ 104,446
Restricted cash
1,295
1,089
Short-term bank deposits
253,400
217,200
Accounts receivable, net
160,488
115,361
Prepaid expenses and other
current assets
12,049
8,075
Total Current Assets
603,458
446,171
Long-Term Assets:
Property and equipment, net
3,611
4,211
Operating lease right-of-use
assets
10,130
11,578
Goodwill and intangible assets,
net
247,191
245,965
Deferred taxes
5,779
5,228
Other assets
49
79
Total Long-Term Assets
266,760
267,061
Total Assets
$ 870,218
$ 713,232
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities:
Accounts payable
$ 155,854
$ 107,730
Accrued expenses and other
liabilities
37,869
40,331
Short-term operating lease
liability
3,900
3,615
Deferred revenue
2,377
3,852
Short-term payment obligation
related to acquisitions
34,608
38,179
Total Current
Liabilities
234,608
193,707
Long-Term Liabilities:
Payment obligation related to
acquisition
33,113
33,250
Long-term operating lease
liability
7,580
9,774
Other long-term liabilities
11,783
9,541
Total Long-Term
Liabilities
52,476
52,565
Total Liabilities
287,084
246,272
Shareholders' equity:
Ordinary shares
398
375
Additional paid-in capital
513,534
496,154
Treasury shares at cost
(1,002)
(1,002)
Accumulated other comprehensive
loss
(582)
(128)
Retained earnings (accumulated
deficit)
70,786
(28,439)
Total Shareholders'
Equity
583,134
466,960
Total Liabilities and
Shareholders' Equity
$ 870,218
$ 713,232
PERION NETWORK LTD. AND ITS
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS In
thousands
Three months ended
Year ended
December 31,
December 31,
2022
2021
2022
2021
(Unaudited)
(Unaudited)
(Unaudited)
(Audited)
Cash
flows from operating activities:
Net Income
$ 38,677
$ 17,695
$ 99,225
$ 38,706
Adjustments required to reconcile
net income to net cash provided by operating activities:
Depreciation and amortization
3,741
3,598
13,838
9,897
Stock-based compensation
expense
3,205
3,252
11,570
6,985
Foreign currency translation
258
(116)
20
(223)
Accrued interest, net
(1,639)
(80)
(3,646)
(300)
Deferred taxes, net
(2,755)
(2,572)
(1,428)
(2,755)
Accrued severance pay, net
222
330
(106)
663
Gain from sale of property and
equipment
(2)
132
(12)
121
Net changes in operating assets
and liabilities
(3,536)
6,597
2,658
18,012
Net cash provided by operating
activities
$ 38,171
$ 28,836
$ 122,119
$ 71,106
Cash
flows from investing activities:
Purchases of property and
equipment, net of sales
(267)
(37)
(1,046)
(532)
Short-term deposits, net
(34,400)
(157,200)
(36,200)
(204,500)
Cash paid in connection with
acquisitions, net of cash acquired
-
(35,000)
(9,570)
(38,438)
Net cash used in investing
activities
$ (34,667)
$ (192,237)
$ (46,816)
$ (243,470)
Cash
flows from financing activities:
Issuance of shares in private
placement, net
-
169,529
-
230,489
Proceeds from exercise of
stock-based compensation
1,392
1,958
5,833
6,898
Payments of contingent
consideration
-
-
(9,091)
-
Repayment of long-term loans
-
-
-
(8,333)
Net cash provided by (used in)
financing activities
$ 1,392
$ 171,487
$ (3,258)
$ 229,054
Effect of exchange rate changes
on cash and cash equivalents and restricted cash
228
16
(59)
(33)
Net increase in cash and cash
equivalents and restricted cash
5,124
8,102
71,986
56,657
Cash and cash equivalents and
restricted cash at beginning of period
172,397
97,433
105,535
48,878
Cash and cash equivalents and
restricted cash at end of period
$ 177,521
$ 105,535
$ 177,521
$ 105,535
PERION NETWORK LTD. AND ITS
SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP RESULTS In
thousands (except share and per share data)
Three months ended
Year ended
December 31,
December 31,
2022
2021
2022
2021
(Unaudited)
(Unaudited)
GAAP Net Income
$ 38,677
$ 17,695
$ 99,225
$ 38,706
Stock-based compensation
3,205
3,252
11,570
6,985
Amortization of acquired
intangible assets
2,988
2,807
11,884
6,875
Retention and other related to
M&A related expenses
100
3,547
1,618
9,074
Changes in FV of Earnout
contingent consideration
-
(2,246)
(3,816)
(2,246)
Foreign exchange losses (gains)
associated with ASC-842
3
169
(821)
(38)
Revaluation of acquisition
related contingent consideration
184
286
786
761
Taxes on the above items
(506)
(222)
(651)
(130)
Non-GAAP Net Income
$ 44,651
$ 25,288
$ 119,795
$ 59,987
Non-GAAP Net Income
$ 44,651
$ 25,288
$ 119,795
$ 59,987
Taxes on income
4,993
2,857
15,090
6,739
Financial income, net
(2,163)
10
(4,467)
(142)
Depreciation
753
791
1,954
3,022
Adjusted EBITDA
$ 48,234
$ 28,946
$ 132,372
$ 69,606
Non-GAAP diluted earnings per
share
$ 0.90
$ 0.62
$ 2.47
$ 1.57
Shares used in computing
non-GAAP diluted earnings per share
49,511,914
40,613,055
48,496,154
38,176,470
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230208005485/en/
Perion Network Ltd. Dudi Musler, VP of Investor Relations +972
(54) 7876785 dudim@perion.com Source: Perion Network Ltd.
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