Perion Network Ltd. Q2 FY2025 earnings call

• Tal Jacobson discussed Perion's vision of becoming a CMO platform of choice with Perion One, a channel-neutral platform integrating creative, data, and AI. • Achievements included non-search revenue growth for the first time since Q3 2023, retail media, digital out-of-home, and web growth, and launch of a new performance CTV solution. • Integration of Greenbids is on track, generating synergies. • Expanded programmatic digital out-of-home footprint in APAC and EMEA. • Strategic shift with acquisitions like Hivestack and Greenbids to align with AI-first strategy.

Revenue for the second quarter was $103 million, with an 8% year-over-year increase in advertising solutions revenue. Digital out-of-home increased by 35% year-over-year, reaching 17% of total revenue. CTV declined by 5% year-over-year, representing 9% of revenue. Retail Media generated $22.3 million in the second quarter, a 27% year-over-year increase. Web revenue increased by 5% year-over-year, representing 52% of total revenue. Search revenue for the quarter was $22.4 million, representing 22% of total revenue.

• Reiterated full-year outlook with revenue in the range of $430 million to $450 million and adjusted EBITDA in the range of $44 million to $46 million. • Confident in CTV annual growth, expecting to outpace market growth. • Progress with Greenbids integration, with over $1 million of Perion Algo deals booked from existing customers. • Reaffirmed full-year outlook raised in May.

• CTV budget shifting to the second half of the year impacted Q2 results. • Potential market shifts affecting search and web revenue in the long term.

Q: Regarding the 5% decline in CTV, was it industry-wide or specific to Perion's advertisers?

A: Tal Jacobson stated it was due to budget shifting to other formats in Q2, but CTV budgets are shifted to H2, and the performance CTV solution will help in H2 and beyond.

Q: Confidence in CTV growth in the back half?

A: Elad Tzubery mentioned healthy demand, pipeline increase, and expectation to outpace market growth.

Q: Sales organization rightsized for Perion One?

A: Elad Tzubery discussed efficiency in sales operations, expecting EBITDA margin increase and leveraging white label for efficiency.

Q: Impact of AI search on web business?

A: Tal Jacobson said web search may decline, but Perion is channel-agnostic, focusing on delivering outcomes for advertisers.

Q: Performance TV targeting mid-market customers?

A: Tal Jacobson said no immediate self-serve for mid-market, focusing on outcome-driven campaigns for now.

Q: Cost of revenue growth?

A: Elad Tzubery mentioned increase due to retail vertical growth and hosting services, with focus on automation for efficiency.

Q: Digital out-of-home geographic expansion impact?

A: Tal Jacobson said digital out-of-home expansion in APAC and EMEA helps with cross-selling and synergies with other products.