CEO Open Letter Q4 & FY 2025

Dear Investors, Customers, and Employees,

2025 was not just another year for Perion. It was Year One for the new Perion.

Year One of Perion One.

We did not adjust around the edges. We rebuilt the company. We unified our assets, simplified our structure, embedded AI at the core of execution, and positioned Perion for durable, scalable growth in an era where only true execution infrastructures will not only survive, but thrive.

This transformation happened at precisely the right moment.

AI is reshaping the digital economy faster than most expected. Recent market reactions to major AI releases made one thing clear: investors are re-evaluating the entire application layer. Dashboards, workflow tools, and thin abstraction software are vulnerable.

The market is right to be skeptical.

If your value is primarily an interface, AI can and will replace you.

But the market is misclassifying some companies.

It is confusing rendering with execution.

AI can generate a plan. It can visualize an outcome. It can recommend budget shifts.

But AI models alone cannot operate the real-time plumbing of digital advertising independently, where bids clear in milliseconds, pricing precision determines ROI, supply paths must be continuously optimized, and financial accountability is non-negotiable.

Execution is infrastructure.

And infrastructure is where value consolidates.

Perion operates at the execution infrastructure layer.

We are not an application-layer software company. We are transforming into an AI-native execution infrastructure company.

That distinction is structural.

When interfaces commoditize, infrastructure compounds.

Perion One is unifying our brands, technologies, and data into a single AI-native operating system powering planning, activation, optimization, and measurement across the digital ecosystem.

At its core is Outmax, our proprietary AI Agent running directly into production. Outmax does not sit on top of workflows. It operates inside the execution layer. It autonomously allocates spend, manages pacing, optimizes pricing, and drives yield within Open Web, CTV, YouTube, Meta, DOOH, and Retail Media.

But the next phase goes even further.

We are moving into a world where agents will interact with agents. Marketing agents will communicate directly with supply-side agents, optimization agents, pricing agents, and measurement agents. Decisions will increasingly be machine-to-machine, executed in milliseconds without human mediation.

In that world, the critical question is not who owns the interface.

The critical question is who owns the rails.

Perion’s execution infrastructure is built to be the backbone for agent-to-agent engagement.

Our systems are already designed for autonomous allocation, real-time pricing discipline, and cross-channel orchestration under strict constraints. As AI agents increasingly transact with other AI agents, they will require trusted, neutral, execution-grade infrastructure to clear, optimize, and settle those decisions.

We intend for Perion to be that backbone.

Very few companies can operate credibly across both the open web and DOOH ecosystems and within walled-garden platforms. That capability requires scale, trust, and deep integration developed over the years.

This is not theoretical positioning. It is becoming an operational reality.

And another structural shift is approaching that we are already addressing.

AI is powerful, but it is energy-intensive.

As AI adoption accelerates globally, electricity consumption and carbon impact will become central constraints. Efficiency will no longer be optional. It will be a competitive advantage.

Our AI Agent model, GreenBids (the company we acquired in mid-2025), was originally developed to reduce carbon emissions in digital advertising by optimizing supply paths and reducing waste.

The same optimization discipline that reduces computational load and electricity usage results in reduced carbon emissions.

As AI execution agents scale, energy efficiency will matter. Infrastructure that can execute with less waste, fewer unnecessary calls, and smarter allocation will be favored.

We are not waiting for the energy challenge to arrive.

We are already part of the solution.

In 2025, we proved the strength of this foundation.

We delivered our second consecutive quarter of year-over-year growth. Fourth-quarter results included a 19% increase in contribution ex-TAC and a 53% surge in adjusted EBITDA. Our growth engines in CTV, DOOH, and Retail Media delivered high double-digit expansion, outpacing market growth and restoring sustained momentum to Advertising Solutions.

At the same time, we simplified our operating model, strengthened leadership accountability, generated significant operating and free cash flow, and ended the year with $313 million dollars in net cash.

We returned over $118 million dollars to shareholders through disciplined share repurchases, reducing share count and reinforcing our conviction in the intrinsic value of this company.

2025 was about proof.

2026 and beyond will be about scale.

The AI transition will not be gradual. It will be decisive. Application-layer businesses will compress. Margins built on application-only layers will erode. Capital will rotate toward companies that control execution.

We anticipate that infrastructure players will capture a disproportionate share of value as the ecosystem consolidates.

We believe that Perion is positioned to be one of the winners.

This is the inflection point.

We are introducing a long-term framework through 2028 that reflects our confidence in sustained organic growth, expanding Contribution ex-TAC and Adjusted EBITDA margins, and a continued shift in revenue mix toward Perion One. AI-enabled operating leverage is embedded in our architecture. And while 2028 seems like a long way off, our agile approach to R&D allows us to adopt the long-term framework as we achieve breakthroughs.

As adoption expands, we expect results to drive budget expansion. As budgets expand, operating leverage accelerates. As leverage accelerates, cash generation compounds.

This is a scalable model built for the AI era.

For customers, Perion One delivers measurable performance across fragmented channels through a unified AI execution Agent.

For employees, this marks the shift from transformation to acceleration.

For investors, this is where structural positioning begins to convert into financial compounding.

The market is still debating interfaces.

We have moved from proving the model to scaling the model.

The execution backbone is in place.

The financial leverage is visible.

The balance sheet is strong.

In a world of agents interacting with agents, the backbone matters more than the screen.

Perion intends to own that backbone.

The model is working.

And we are just getting started.

Sincerely,

Tal Jacobson

CEO, Perion