Press Releases Perion Generates Record Year-Over-Year 368% GAAP Net Income Growth; $15.5 Million, $0.33 EPS Revenue Up 40% to $125.3 Million

Perion Generates Record Year-Over-Year 368% GAAP Net Income Growth; $15.5 Million, $0.33 EPS Revenue Up 40% to $125.3 Million

Published on

28th Apr 2022

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TEL AVIV, Israel & NEW YORK–(BUSINESS WIRE)–Apr. 28, 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 – today announced record financial results for the first quarter ending March 31, 2022.

 

Doron Gerstel, Perion’s CEO, commented, “Our exceptional financial performance is a direct result of our diversification strategy, our continuing investment in high-impact innovation, and our ability to connect the supply and demand sides of the open-web to our central iHub – an intelligent control system. The iHub embodies our diversification strategy, which was built through significant organic innovation and successful strategic acquisitions. For instance, a key factor behind Perion’s 80% year-over-year revenue growth in Display Advertising is the strong adoption of SORTTM – proprietary cookie-free technology which delivers greater ROAS for our customers than 3rd party cookies.”

 

First Quarter 2022 Highlights

  • Display Advertising revenue grew 80% (or 52% on pro forma basis), driven by accelerating adoption of Perion’s video and CTV solutions, leading to an increase of average client spend by 42% and a 3% increase in number of clients;
  • Video and CTV revenue grew by 341% year-over-year, (or 123% on a proforma basis), representing 46% of Display advertising revenue;
  • Search advertising revenue grew 10%, primarily driven by an increased number of commercial searches, as well as in the percentage of transactional searches;
  • Adjusted EBITDA margin expanded to 42% of revenue excluding traffic acquisitions costs compared to 25% during the first quarter of 2021, as a result of continuous improvement of iHub;
  • Net cash provided by operating activities of $23.6 million; Perion had $342.5 million in cash and zero debt as of March 31, 2022.

 

First Quarter 2022 Financial Highlights*

(In millions, except per share data)

Three months ended

March 31,

2022

2021

%

Display Advertising revenue

$

68.6

$

38.1

+80%

Search Advertising revenue

$

56.7

$

51.7

+10%

Total Revenue

$

125.3

$

89.8

+40%

GAAP Net Income

$

15.5

$

3.3

+368%

Non-GAAP Net Income

$

20.7

$

7.0

+196%

Adjusted EBITDA

$

22.7

$

8.8

+158%

Adjusted EBITDA/Revenue Ex TAC

42%

25%

+66%

Net cash provided by operating activities

$

23.6

$

13.5

+75%

GAAP Diluted Earnings Per Share

$

0.33

$

0.09

+267%

Non-GAAP Diluted Earnings Per Share

$

0.44

$

0.19

+132%

* Reconciliation of GAAP to Non-GAAP measures follows.

 

Mr. Gerstel added “Perion’s newly acquired Vidazoo – a video monetization platform – is also winning market share and supporting our strategic success in growing our Display Advertising revenue, which represented 55% of our total revenue, up from 42% one year ago and 36% two years ago. Our ability to connect all media transactions to our central intelligent HUB is key factor behind the growth of media margin; 43% in the first quarter, up from 39% in the first quarter last year. This resulted in record first quarterly EBITDA levels, on our highest-ever EBITDA margins, and $23.6 million in operating cash flow.”

 

“The strong performance, led by our predictable and sustainable business model gave us increased confidence to update our full-year outlook,” Gerstel concluded. “With robust growth, increased profitability, and $342.5 million in cash and zero debt, Perion is poised to further accelerate its momentum. This positions us well for a post-cookie future, one where privacy consciousness will drive more and more advertising decisions. We have the platform, track record, proven team, and financial depth to drive enduring success.

 

Gerstel concluded ”Separately, we announced that yesterday we were honored with the Microsoft Advertising’s prestigious GLOBAL Supply Partner of the Year Award”.

 

Financial Comparison for the First Quarter of 2022

Revenue: Revenue increased by 40% to $125.3 million in the first quarter of 2022 from $89.8 million in the first quarter of 2021. This growth was led by an 80% (or 52% on a pro forma basis) increase in Display Advertising revenue, primarily from growth of 341% in video and CTV, (or 123% on a proforma basis), now representing 46% of display advertising revenue compared with 19% in the first quarter of 2021 (or 31% on a pro forma basis), as well as a 42% increase in average revenues per client and a 3% increase in the number of clients. Search Advertising revenue increased by 10% and represented 45% of revenue, growth was achieved primarily due to 18.1 million average daily commercial searches compared to 17.7 million in the first quarter of 2021, and the addition of 25 new publishers to our network.

 

Traffic Acquisition Costs (“TAC”): In the first quarter of 2022, TAC were $71.0 million, or 56.6% of revenue, compared to $54.9 million, or 61.1% of revenue, in the first quarter of 2021. The decrease of 4.5% was primarily due to a favorable product mix of ad formats, and the continuous iHub efforts to serve direct demand and supply in a closed loop that generates superior efficiency and performance.

 

Net Income: On a GAAP basis, net income increased by 367.8% to $15.5 million in the first quarter of 2022 from $3.3 million in the first quarter of 2021.

 

Non-GAAP Net Income: In the first quarter of 2022, non-GAAP net income was $20.7 million, or 16.5% of revenue, compared to the $7.0 million, or 7.8% of revenue, in the first quarter of 2021. A reconciliation of GAAP to non-GAAP net income is included in this press release.

 

Adjusted EBITDA: In the first quarter of 2022, Adjusted EBITDA was $22.7 million, or 18.1% of revenue (and 41.7% of revenue Ex TAC), compared to $8.8 million, or 9.8% of revenue (and 25.1% of revenue Ex TAC), in the first quarter of 2021. 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, 2022, cash and cash equivalents and short-term bank deposits were $342.5 million. Net cash provided by operating activities in the first quarter of 2022 was $23.6 million, compared to $13.5 million in the first quarter of 2021.

 

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

$610-$630

$620-$640

32%

Adjusted EBITDA

$69.6

$88-$92

$98-$102

44%

EBITDA to REV Ex-TAC

37%

36%

40%

* At guidance midpoint

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