Updates Full Year 2024 Guidance and Increases
Buyback Program from $50 million to $75 Million
Expects to Announce Q1 2024 Financial Results
on May 8
Perion Network Ltd. (NASDAQ & TASE: PERI), a technology
leader in connecting advertisers to consumers across all major
digital channels, announced today preliminary financial results for
Q1 2024 and updated its full year 2024 guidance.
In the first quarter of 2024, Perion experienced a decline in
Search Advertising activity, attributable to changes in advertising
pricing and mechanisms implemented by Microsoft Bing in its Search
Distribution marketplace. These adjustments led to a reduction in
Revenue Per Thousand Impressions (RPM) for both Perion and other
Microsoft Bing distribution partners. These changes contributed to
decreased search volume.
As a result of the Microsoft Bing modifications, Perion expects
Q1 2024 revenue and adjusted EBITDA1 of $157 million and $20
million, respectively. For the full year 2024, the Company
currently expects revenue and adjusted EBITDA1 of $590-$610 million
and $78- $82 million, respectively. The decrease is mainly
attributed to Search Advertising, and to a limited extent to the
web video activity. The rest of the business indicators remain
positive.
“Our relationship with Microsoft remains strong and both
organizations continue to explore more opportunities to collaborate
on a variety of digital advertising solutions,” commented Tal
Jacobson, Perion’s CEO. "Our strategy was, and continues to be,
grounded in a fundamental principle of making sure our solutions
are diversified in terms of technologies, channels and partners,
while focusing on the needs of our customers, brands and retailers
across the digital advertising domain. We continue to expand and
strengthen our solutions and technologies by leveraging our cash
flow generation and strong cash balance of almost half a billion
USD to acquire companies that are complementary and additive to our
growth.
A key driver of our long-term success is our focus on expanding
our Display Advertising activity, whose growth drivers include
AI-driven CTV, Retail Media and Digital out-of-home (DOOH). These
growth drivers continued to deliver meaningful growth in the first
quarter and are expected to increasingly contribute to our results
in 2024.”
Mr. Jacobson concluded, “Management and our Board of Directors
are confident that Perion is competitively well positioned for
continued success within the digital advertising landscape, and
thus approved an increase to our buyback program from $50 million
to up to $75 million, capitalizing on our strong cash
position.”
1 See footnote 2 below
Q1 2024 Preliminary Results 2:
In millions
Q1 2023 Actual
Q1 2024 Preliminary
Results
YoY
Revenue
$145.2
$157.0
+8%
Adjusted EBITDA1
$31.3
$20.0
-36%
Adjusted EBITDA to Revenue1
22%
13%
Adjusted EBITDA to Contribution1
ex-TAC
48%
33%
Updated Full Year 2024 Guidance2:
In millions
FY 2023 Actual
Prior 2024 Guidance
Updated 2024 Guidance
YoY
Revenue
$743.2
$860-$880
$590-$610
-19%3
Adjusted EBITDA1
$169.1
$178-$182
$78-$82
-53%3
Adjusted EBITDA to Revenue1
23%
21%3
13%3
Adjusted EBITDA to Contribution1
ex-TAC
55%
51%3
30%3
1 Contribution ex-TAC and Adjusted EBITDA are non-GAAP measures.
See below reconciliation of GAAP to 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.
3 Calculated at revenue and adjusted EBITDA guidance
midpoint.
Share repurchases under the program will be made from time to
time in open market purchases, private transactions or other
transactions as permitted by securities laws and other legal
requirements. The timing and amounts of any purchases will be based
on market conditions and other factors including but not limited to
price, regulatory requirements and capital availability. The
program does not require the purchase of any minimum dollar amount
or number of shares and the program may be modified, suspended or
discontinued at any time.
Q1 2024 Earning call
Perion plans to release first quarter 2024 results prior to the
opening of the financial markets on Wednesday, May 8, 2024.
Tal Jacobson, CEO, and Maoz Sigron, CFO, will host a conference
call to discuss the results on that day at 8:30 a.m. ET.
Earning Call details
- Registration link:
https://incommconferencing.zoom.us/webinar/register/WN_EqMzgjKySiuCBeC1sYyw_Q
- Toll Free: 877-407-0779
- Toll/International: +1 201-389-0914
About Perion Network Ltd.
Perion connects advertisers with consumers through technology
across all major digital channels. These channels converge at
Perion’s intelligent HUB (iHUB), which connects the company’s
demand and supply assets, providing significant benefits to brands
and publishers. For more information, visit Perion's website at
www.perion.com.
Non-GAAP Measures
Non-GAAP financial measures consist of GAAP financial measures
adjusted to exclude certain items. This press release includes
certain non-GAAP measures, including Contribution ex-TAC and
Adjusted EBITDA.
Contribution ex-TAC presents revenue reduced by traffic
acquisition costs and media buy, reflecting a portion of our
revenue that must be directly passed to publishers or advertisers
and presents our revenue excluding such items. We believe
Contribution ex-TAC is a useful measure in assessing the
performance of the Company because it facilitates a consistent
comparison against our core business without considering the impact
of traffic acquisition costs and media buy related to revenue
reported on a gross basis.
Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization ("Adjusted EBITDA") is defined as income from
operations excluding stock-based compensation expenses,
depreciation, amortization of acquired intangible assets, retention
and other acquisition-related expenses and gains and losses
recognized with respect to changes in the fair value of contingent
consideration.
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. Due to the high variability and difficulty in making
accurate forecasts and projections of some of the information
excluded from these projected measures, together with some of the
excluded information not being ascertainable or accessible, we are
unable to quantify certain amounts that would be required for such
presentation without unreasonable effort. Consequently, no
reconciliation of the forward-looking non-GAAP financial measures
is included in this press release.
The following table reconciles Revenue to Contribution
ex-TAC:
(In thousands) (estimated and
unaudited):
Three Months Ended
March 31, 2024
March 31, 2023
Revenue
$
157,000
$
145,150
Traffic acquisition costs and media
buy
97,000
79,875
Contribution ex-TAC
$
60,000
$
65,275
The following table reconciles GAAP Income from Operations to
Adjusted EBITDA:
(In thousands) (estimated and
unaudited):
Three Months Ended
March 31, 2024
March 31, 2023
GAAP Income from Operations
$
8,250
$
24,504
Share-based compensation
5,100
3,402
Retention and other expenses related to
M&A
1,750
7
Amortization of acquired intangible
assets
4,100
2,963
Depreciation
800
398
Adjusted EBITDA
$
20,000
$
31,274
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,”
“estimate” 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, but not limited to, 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, data breaches, cyber-attacks and other similar
incidents, unpredictable sales cycles, competitive pressures,
market acceptance of new products, changes in applicable laws and
regulations as well as industry self-regulation, 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, 2022 filed with the
SEC on March 15, 2023. Perion does not assume any obligation to
update these forward-looking statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20240408611223/en/
Perion Network Ltd. Dudi Musler, VP of Investor Relations +972
(54) 7876785 dudim@perion.com
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