Press Releases Perion Delivers Strong Results with 22% Year-Over-Year Increase in Revenue and 45% Growth in Adjusted EBITDA

Perion Delivers Strong Results with 22% Year-Over-Year Increase in Revenue and 45% Growth in Adjusted EBITDA

Published on

02nd Aug 2023

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TEL AVIV & NEW YORK–(BUSINESS WIRE)–Aug. 2, 2023– 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.

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