Press Releases Perion Reports First Quarter 2024 Results; YoY Revenue Growth of 9%

Perion Reports First Quarter 2024 Results; YoY Revenue Growth of 9%

Published on

08th May 2024

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108% YoY growth in CTV Advertising; 134% YoY growth in Retail Media; 25% YoY growth in Digital Out of Home (DOOH) Advertising on a proforma basis

 

New York & Tel Aviv– May 8, 2024 – Perion Network Ltd. (NASDAQ and TASE: PERI), a technology leader in connecting advertisers to consumers across all major digital channels, today reported its financial results for the first quarter ended March 31, 2024.

 

“Perion is a resilient and agile company and we are confident in our strategic positioning to overcome challenges, including recent changes in advertising pricing and mechanisms introduced by Microsoft Bing,” stated Tal Jacobson, CEO of Perion. 

 

“Perion continues to expand its universe of technological advertising solutions, capitalizing on strong organic growth engines that include our Retail Media solutions and CTV advertising, as well as our strategic acquisition of cutting-edge programmatic DOOH technology. Each of these growth engines demonstrated strong year-over-year growth in the first quarter and are expected to contribute meaningfully to our results going forward. In parallel, our AI Lab continues to deliver new technologies, including the introduction of SORT® 2.0, an AI-based audience segmentation technology which is now also available for CTV, and our WAVE technology for dynamic audio ads, which now supports Spanish as well.”

 

“As we enter the next phase of Perion’s evolution, we are focused on building an advertiser-centric universe that powers brand presence across the consumer journey. This approach is wrapped in a new brand identity and positioning. This embodies our commitment to our clients to stay ahead of the curve, ensuring that wherever their audiences are in their journey Perion is there to elevate their brand and outcomes.” 

 

“Leveraging our strong balance sheet, we will continue to pursue opportunities to develop additional solutions and expand our product offering for our customers, while enhancing long-term value for shareholders,” Jacobson concluded.

 

First Quarter 2024 Business Highlights

  • Retail Media1 revenue increased 134% year-over-year to $14.9 million, representing 20% of Advertising Solutions2 revenue compared to 8% last year
  • CTV revenue increased 108% year-over-year to $8.2 million, representing 11% of Advertising Solutions2 revenue compared to 5% last year
  • Video revenue decreased 52% year-over-year, representing 22% of Advertising Solutions2 revenue, compared to 44% last year
  • The number of Average Daily Searches increased by 20% year-over-year reaching 31.6 million and the number of Search Advertising publishers increased by 8% year-over-year to 168.  During the quarter, RPM, Average Daily Searches and the number of Search Advertising publishers started to decline, a trend that is expected to be fully reflected in the second quarter results and onwards. 

1  Retail Media revenue include all media channels, such as, CTV, DOOH, video, and others

2  Formerly referred to as Display Advertising, includes all Perion’s digital advertising activities except Search Advertising

 

First Quarter 2024 Financial Highlights1

 

In millions,
except per share data
Three months ended  
  March 31,  
  2024   2023   %  
Advertising Solutions Revenue $       75.8    $       79.9    -5%  
Search Advertising Revenue $       82.0    $       65.3    +26%  
Total Revenue $   157.8    $   145.2    +9%  
Contribution ex-TAC (Revenue ex-TAC) $       60.2    $       65.3    -8%  
GAAP Net Income $       11.8    $       23.8    -51%  
Non-GAAP Net Income $       22.6    $       29.9    -25%  
Adjusted EBITDA $       20.3    $       31.3    -35%  
Adjusted EBITDA to Contribution ex-TAC   34%     48%      
Net Cash from Operations $         6.9    $       17.8    -61%  
GAAP Diluted EPS $       0.24    $       0.48    -50%  
Non-GAAP Diluted EPS  $       0.44    $       0.60    -27%  
                 

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.  

 

Financial Outlook2

Q2 2024 Guidance

  • Revenue of $118 to $122 million
  • Adjusted EBITDA1 of $10 to $12 million
  • Adjusted EBITDA1 to contribution ex-TAC1 of 20% at the midpoint

 

FY 2024 Guidance

  • Revenue of $590 to $610 million
  • Adjusted EBITDA1 of $78 to $82 million
  • Adjusted EBITDA1 to contribution ex-TAC1 of 30% at the midpoint

 

Share Repurchase program

As announced on April 8, 2024, Perion’s Board of Directors has approved the expansion of its previously authorized share repurchase program from $50 million to up to $75 million.

 

1 Contribution ex-TAC and Adjusted EBITDA are non-GAAP measures.   

 

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 First Quarter of 2024

Revenue: Revenue increased by 9% to $157.8 million in the first quarter of 2024 from $145.2 million in the first quarter of 2023. Advertising Solutions revenue decreased 5%, accounting for 48% of total revenue, primarily due to a 52% decrease in video revenue, partially offset by increase in Digital Out of Home of $9.7 million and 108% increase in CTV revenue to $8.2 million. Search Advertising revenue increased by 26%, accounting for 52% of revenue, primarily due to 20% increase in Average Daily Searches and 8% increase in the number of publishers. Changes in advertising pricing and mechanisms implemented by Microsoft Bing in its Search Distribution marketplace led to a decline in our Search Advertising activity. During the quarter, RPM, Average Daily Searches and the number of Search Advertising publishers started to decline, a trend that is expected to be fully reflected in the second quarter results and throughout 2024.

 

Traffic Acquisition Costs and Media Buy (“TAC”): TAC amounted to $97.6 million, or 62% of revenue, in the first quarter of 2024, compared with $79.9 million, or 55% of revenue, in the first quarter of 2023. The increase in TAC was primarily due to shifts in product mix and higher revenue share for some of our Search Advertising publishers in the first quarter of 2024.

 

GAAP Net Income: GAAP net income decreased by 51% to $11.8 million in the first quarter of 2024, compared with $23.8 million, in the first quarter of 2023. 

 

Non-GAAP Net Income: Non-GAAP net income decreased by 25% to $22.6 million, or 14% of revenue, in the first quarter of 2024, compared with $29.9 million, or 21% of revenue, in the first quarter of 2023. A reconciliation of GAAP to non-GAAP net income is included in this press release.

 

Adjusted EBITDA: Adjusted EBITDA was $20.3 million, or 13% of revenue (and 34% of Contribution ex-TAC) in the first quarter of 2024, compared with $31.3 million, or 22% of revenue (and 48% of Contribution ex-TAC) in the first quarter of 2023. 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 first quarter of 2024 was $6.9 million, compared with $17.8 million in the first quarter of 2023. The decrease in operating cash flow was mainly attributed to the reduction in Search Advertising activity and one-time working capital needs for the Hivestack operations.

 

Net cash: As of March 31, 2024, cash and cash equivalents, short-term bank deposits and marketable securities were $479.7 million, compared with $472.7 million as of December 31, 2023.

 

 

Conference Call

Perion’s management will host a conference call to discuss the results at 8:30 a.m. ET today:

  • Registration link: 

https://incommconferencing.zoom.us/webinar/register/WN_EqMzgjKySiuCBeC1sYyw_Q

  • Toll Free: 1-877-407-0779
  • Toll/International: 1-201-389-0914

 

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