Press Releases Perion Continues Momentum, Delivering 34% Year-Over-Year Record Revenue Growth in the Fourth Quarter While Doubling Net Income

Perion Continues Momentum, Delivering 34% Year-Over-Year Record Revenue Growth in the Fourth Quarter While Doubling Net Income

Published on

09th Feb 2022

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TEL AVIV, Israel & NEW YORK–(BUSINESS WIRE)–Feb. 9, 2022– Perion Network Ltd. (NASDAQ: PERI), a global advertising technology company that delivers a holistic solution across the three main pillars of digital advertising – ad search, social media, and display / video / CTV advertising – today announced record financial results for the fourth quarter and full-year period ended December 31, 2021.

 

Doron Gerstel, Perion’s CEO, commented, “Record fourth quarter and full year outstanding financial performance are a direct result of Perion’s diversification strategy and our ability to connect all our assets into a single intelligent hub, demonstrating Perion’s sustainable and predictable business model.”

 

“Financial results for 2021, included stellar growth of 300% in total video and CTV revenue (or 123% on a proforma basis), with the fast-growing subset of CTV up 205%.” Gerstel added “Simultaneously, our expanded relationship with Microsoft Bing drove a 19% increase in search advertising revenue and significant incremental EBITDA.”

 

Gerstel concluded “Our unique acquisition strategy behaved exactly as we intended – creating synergistic growth and widening our competitive moat. With $322 million net cash in our balance sheet we intend to continue that model, adding to our already-strong position in a fast-growing environment.”

 

Fourth Quarter 2021 Highlights

  • Display Advertising revenue growth of 46% (or 23% on a proforma basis), driven by accelerated adoption of Perion’s video and CTV solutions, leading to an increase in average revenue per client of 29%;
  • Video and CTV grew by 311% year-over-year, or 87% on a proforma basis, representing 46% of Display Advertising revenue;
  • Search Advertising revenue growth of 16%, primarily driven by an increased number of commercial searches, as well as a higher percentage of transactional searches;
  • EBITDA margin from revenue excluding TAC grew to 45% compared to 35% during the fourth quarter of 2020, as a result of our investment in automation and offshoring our operations;
  • Net cash provided by operating activities of $28.8 million;
  • Net cash of $321.6 million.

 

Fourth Quarter 2021 Financial Highlights*

(In millions, except per share data)

Three months ended

Year ended

December 31,

December 31,

2021

2020

%

2021

2020

%

Display Advertising revenue

$

100.2

$

68.4

+46%

$

265.3

$

148.7

+78%

Search Advertising revenue

$

57.8

$

49.9

+16%

$

213.2

$

179.4

+19%

Total Revenue

$

158.0

$

118.3

+34%

$

478.5

$

328.1

+46%

GAAP Net Income

$

17.7

$

9.0

+97%

$

38.7

$

10.2

+279%

Non-GAAP Net Income

$

25.3

$

13.8

+83%

$

60.0

$

26.6

+125%

Adjusted EBITDA

$

28.9

$

15.3

+89%

$

69.6

$

32.8

+112%

Adjusted EBITDA/Revenue Ex TAC

45%

35%

+27%

37%

25%

+45%

Net cash provided by operating activities

$

28.8

$

12.9

+123%

$

71.1

$

22.2

+221%

GAAP Diluted Earnings Per Share

$

0.44

$

0.30

+47%

$

1.02

$

0.36

+183%

Non-GAAP Diluted Earnings Per Share

$

0.62

$

0.45

+38%

$

1.57

$

0.91

+73%

* Reconciliation of GAAP to Non-GAAP measures follows.

 

Financial Comparison for the Fourth Quarter of 2021

Revenue: Revenue increased by 34% to $158.0 million in the fourth quarter of 2021 from $118.3 million in the fourth quarter of 2020. This growth was led by a 46% (or 23% on a proforma basis) increase in Display Advertising revenue, primarily from growth of 87% in video and CTV, on a proforma basis, representing 63% of total revenue compared to 58% in 2020. Search Advertising revenue increased by 16% and represented 37% of total revenue compared to 42% in 2020. The increase was achieved primarily due to 17.5 million average daily commercial search queries compared to 15.7 million in the fourth quarter of 2020 and 43% year-over-year increase in the number of publishers in our network.

 

Traffic Acquisition Costs (“TAC”): In the fourth quarter of 2021, TAC was $93.3 million, or 59.1% of revenue, compared to $74.8 million, or 63.3% of revenue, in the fourth quarter of 2020. The decrease of 4.2% was primarily due to product mix and our continuous iHub efforts to serve direct demand and supply in a closed loop, generating superior efficiency and performance.

 

GAAP Net Income: In the fourth quarter of 2021, GAAP net income was $17.7 million compared to $9.0 million in the fourth quarter of 2020.

 

Non-GAAP Net Income: In the fourth quarter of 2021, non-GAAP net income was $25.3 million, or 16.0% of revenue, compared to the $13.8 million, or 11.7% of revenue, in the fourth quarter of 2020. A reconciliation of GAAP to non-GAAP net income is included in this press release.

 

Adjusted EBITDA: In the fourth quarter of 2021, Adjusted EBITDA was $28.9 million, or 18.3% of revenue, compared to $15.3 million, or 13.0% of revenue, in the fourth 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 December 31, 2021, cash and cash equivalents and short-term bank deposits were $321.6 million. Net cash provided by operating activities in the fourth quarter of 2021 was $28.8 million, compared to $12.9 million in the fourth quarter of 2020.

 

Financial Comparison for the full year of 2021

Revenue: Revenue increased by 46% to $478.5 million in 2021, from $328.1 million in 2020. This increase was driven by 78% growth in Display Advertising revenue primarily resulting from 300% growth in video and CTV, representing 55% of total revenue compared to 45% in 2020. Search Advertising increased by 19% and represented 45% of total revenue compared to 55% in 2020. The increase was achieved primarily due to 16.7 million of average daily commercial search queries compared to 13.4 million in 2020 and a 37% year-over-year increase in the number of publishers in our network.

 

Traffic Acquisition Costs (“TAC”): TAC in 2021 was $288.0 million, or 60.2% of revenue, as compared to $197.6 million, or 60.2% of revenue, in 2020. The stabilization of TAC level resulted from the product mix and continuous iHub efforts to serve direct demand and supply in a closed loop, generating significantly improved efficiency and performance.

 

GAAP Net Income: During 2021, GAAP net income was $38.7 million, or 8.1% of revenue, compared to $10.2 million, or 3.1% of revenue in 2020.

 

Non-GAAP Net Income: During 2021, Non-GAAP net income was $60.0 million, or 12.5% of revenue, compared to $26.6 million, or 8.1% of revenue in 2020. A reconciliation of GAAP to non-GAAP net income is included in this press release.

 

Adjusted EBITDA: In 2021, Adjusted EBITDA was $69.6 million, or 14.5% of revenue, compared to $32.8 million, or 10.0% of revenue in 2020. 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 2021 was $71.1 million, compared to $22.2 million in 2020, an increase of 221%.

 

Outlook

Perion has raised its financial guidance for 2022, based on the Company’s strong business momentum and improved visibility.

($M)

2021

Previous 2022 Guidance

Guidance 2022 *

YoY Growth % *

Revenue

$478.5

$590-$610

$610-$630

30%

Adjusted EBITDA

$69.6

$80-$84

$88-$92

29%

EBITDA to REV Ex-TAC

37%

35%

36%

* At guidance midpoint

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