03rd Aug 2021
Results include 211% advertising growth and strong margin Management expects to achieve over $500 million in revenue in 2022, a year earlier than expected, representing a CAGR of 25% between 2020-2022
TEL AVIV & NEW YORK – (BUSINESS WIRE) – Aug. 3, 2021 – Perion Network Ltd. (NASDAQ: PERI), a global advertising technology company that delivers holistic solution across the three main pillars of digital advertising – ad search, social media, and display / video / CTV advertising – announced today its financial results for the second quarter ended June 30, 2021.
Doron Gerstel, Perion’s CEO, commented, “This quarter’s performance is another indicator that we are executing on our disciplined strategic plan and positioned to achieve our three-year targets a year earlier than expected. Based on the strength behind our growth – significantly more dollars spent per campaign and a healthy increase in new clients – we are narrowing the ranges of our 2021 guidance to revenues of $415-$430 million and EBITDA of $50-$51 million as well as introducing guidance for 2022. We expect revenue of $490-$520 million and Adjusted EBITDA of $59-$62 million in 2022.”
Second Quarter 2021 Highlights
Second Quarter 2021 Financial Highlights*
(In millions, except per share data)
* Reconciliation of GAAP to Non-GAAP measures follows.
Mr. Gerstel continued, “Three years ago, we initiated a disciplined process of reducing costs and paying down debt. We then focused on leveraging technology and AI to create competitively differentiated advertising capabilities, which triggered us to introduce an aggressive three-year growth plan. We are on pace to achieve these aggressive revenue and EBITDA targets a year earlier than expected. Perion now has a sustained track record of growth, profitability, and delivering on its promises.”
Financial Comparison for the Second Quarter of 2021
Revenues: Revenues increased by 82% (or 65% on a pro forma basis), from $60.3 million in the second quarter of 2020 to $109.7 million in the second quarter of 2021. This increase was led by a 211% (or 134% on a pro forma basis) increase in Display and Social Advertising revenues, primarily from the growth in video and CTV, which led to a 58% increase in average revenue per client, and a 67% growth in the number of new clients. Search and other revenues increased by 24%, primarily due to 16.9 million of average daily monetizable search queries compared to 13.0 million in the second quarter of 2020, as well as the addition of 28 publishers to our network.
Traffic Acquisition Costs (“TAC”): During the second quarter of 2021 TAC were $66.2 million, or 60.4% of revenues, compared to $36.8 million, or 61.0% of revenues, in the second quarter of 2020.
Net Income: On a GAAP basis, net income increased by 416% from a net loss of $2.2 million in the second quarter of 2020 to net income of $7.1 million in the second quarter of 2021.
Non-GAAP Net Income: In the second quarter of 2021, non-GAAP net income was $12.3 million, or 11.2% of revenues, compared to the $1.9 million, or 3.2% of revenues, in the second quarter of 2020. A reconciliation of GAAP to non-GAAP net income is included in this press release.
Adjusted EBITDA: In the second quarter of 2021, Adjusted EBITDA was $14.3 million, or 13.0% of revenues, compared to $2.5 million, or 4.1% of revenues, in the second 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 June 30, 2021, cash and cash equivalents and short-term bank deposits were $141.2 million. Cash provided by operating activities in the second quarter of 2021 was $14.6 million, compared to $0.2 million in the second quarter of 2020.
Outlook
Perion is narrowing it’s 2021 guidance and expects revenues to be between $415-$430 million (previously $410-$430 million) and EBITDA of $50-$51 million (previously $49-$51 million). Based on the strong business momentum and improved visibility, Perion is introducing guidance for 2022.
($M)
2021 Guidance
YoY
Growth %
2022 Guidance
Revenue
$415-$430
28%*
$490-$520
20%*
Adjusted EBITDA
$50-$51
54%*
$59-$62
EBITDA to REV Ex TAC
30%*
* At guidance midpoint
Conference Call
Perion will host a conference call to discuss the results today, Tuesday, August 3, 2021 at 8:30 a.m. ET. Details are as follows:
About Perion Network Ltd.
Perion is a global technology company that delivers strategic business solutions that enable brands and advertisers to efficiently “Capture and Convince” users across multiple platforms and channels, including interactive connected television – or iCTV. Perion achieves this through its Synchronized Digital Branding capabilities, which are focused on high impact creative; content monetization; its branded search network, in partnership with Microsoft Bing; and social media management that orchestrates and optimizes paid advertising. This diversification positions Perion for growth as budgets shift across categories.
Non-GAAP measures
Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude stock-based compensation expenses, retention and acquisition related expenses, revaluation of acquisition related contingent consideration, amortization of acquired intangible assets and the related taxes thereon, non-recurring expenses, foreign exchange gains (losses) associated with ASC-842, as well as certain accounting entries under the business combination accounting rules that require us to recognize a legal performance obligation related to revenue arrangements of an acquired entity based on its fair value at the date of acquisition. Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) is defined as operating income excluding stock-based compensation expenses, depreciation, acquisition related items consisting of amortization of intangible assets and goodwill and intangible asset impairments, acquisition related expenses, gains and losses recognized on changes in the fair value of contingent consideration arrangements and certain accounting entries under the business combination accounting rules that require us to recognize a legal performance obligation related to revenue arrangements of an acquired entity based on its fair value at the date of acquisition.
The purpose of such adjustments is to give an indication of our performance exclusive of non-cash charges and other items that are considered by management to be outside of our core operating results. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Furthermore, the non-GAAP measures are regularly used internally to understand, manage and evaluate our business and make operating decisions, and we believe that they are useful to investors as a consistent and comparable measure of the ongoing performance of our business. However, our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies. A reconciliation between results on a GAAP and non-GAAP basis is provided in the last table of this press release.
Forward Looking Statements
This press release contains historical information and forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 with respect to the business, financial condition and results of operations of Perion. The words “will”, “believe,” “expect,” “intend,” “plan,” “should” and similar expressions are intended to identify forward-looking statements. Such statements reflect the current views, assumptions and expectations of Perion with respect to future events and are subject to risks and uncertainties. Many factors could cause the actual results, performance or achievements of Perion to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, or financial information, including, among others, the failure to realize the anticipated benefits of companies and businesses we acquired and may acquire in the future, risks entailed in integrating the companies and businesses we acquire, including employee retention and customer acceptance; the risk that such transactions will divert management and other resources from the ongoing operations of the business or otherwise disrupt the conduct of those businesses, potential litigation associated with such transactions, and general risks associated with the business of Perion including intense and frequent changes in the markets in which the businesses operate and in general economic and business conditions, loss of key customers, unpredictable sales cycles, competitive pressures, market acceptance of new products, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, whether referenced or not referenced in this press release. Various other risks and uncertainties may affect Perion and its results of operations, as described in reports filed by Perion with the Securities and Exchange Commission from time to time, including its annual report on Form 20-F for the year ended December 31, 2020 filed with the SEC on March 25, 2021. Perion does not assume any obligation to update these forward-looking statements.
(Unaudited)
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Perion Network Ltd. Rami Rozen, VP of Investor Relations +972 (52) 5694441 ramir@perion.com
Source: Perion Network Ltd.
