Perion Network Ltd. Q3 FY2024 earnings call

• Perion focuses on digital advertising innovations with AI-driven technologies, aiming to provide holistic solutions for CMOs. • Highlights growth engines like digital out of home (63% YOY), retail media (62% YOY), and CTV (19% YOY). • Discussed synergy from acquisitions, such as integrating Undertone's DCO technology into Hivestack's platform for increased inventory. • Addressed the impact of Microsoft Bing's changes on search revenue, noting it represents less than 5% of overall revenue run rate going forward.

In the third quarter, revenue from advertising solutions was $81.3 million, down 18% year-over-year but up 9% sequentially, representing 80% of total revenue. Digital out of home business grew by 63% year-over-year on a pro forma basis to $19.1 million, representing 23% of advertising solutions revenue. CTV business grew by 90% year-over-year to $9.5 million, representing 12% of advertising solutions revenue. Retail media business increased 62% year-over-year to $21 million, representing 26% of advertising solutions revenue. Search advertising was $20.9 million for the third quarter, down 76% year-over-year, representing 20% of total revenue.

• Reiterated the full-year 2024 guidance provided on the second quarter earnings conference call. • Mentioned favorable financial position allowing continued investment in technology, organic growth, and M&A strategy.

• Potential impact of industry trends on CPMs, as seen in CTV growth deceleration. • Dependence on key partnerships and risks associated with changes in those partnerships, like the Microsoft contract ending. • Weakness in traditional display and video advertising formats due to market dynamics.

Q: Andrew Marok asked about digital out of home progress and CTV dynamics.

A: Tal Jacobson responded on digital out of home synergy with retail solutions and CTV growth deceleration due to less sports events in summer.

Q: Jason Helfstein asked about advertising revenue return and long-term EBITDA margins.

A: Tal Jacobson said advertising solutions expected positive growth in Q3 2025 and EBITDA margins to improve next year.

Q: Eric Martinuzzi asked about Microsoft contract tail.

A: Tal Jacobson said there's a tail clause in the Microsoft agreement with revenue in 2025 but de minimis.

Q: Laura Martin asked about Hivestack synergy and Microsoft relationship.

A: Tal Jacobson discussed synergy from integrating DCO into Hivestack and surprise over Microsoft's strategic pivot.

Q: Jeff Martin asked about traditional display trends.

A: Tal Jacobson talked about open web inventory decline and shift to higher margin channels.

Q: Mark Kelley asked about audio inventory access and M&A strategy.

A: Tal Jacobson discussed audio inventory access through partnerships and M&A focus on EBITDA positive, synergetic, technology-driven growth engines.