Perion Network Ltd. Q3 FY2025 earnings call

• Strengthening foundation and executing long-term strategy with solid progress across all business parts. - Introduced new products under Perion One vision: Outmax (unifying AI algorithms for media outcomes across CTV, social, and open web), Soda (AI for Publisher for smarter monetization), and digital out of home player (completing full stack marketing operating system). - Initiated strategic partnerships across retail media and digital out of home. - Won industry awards validating technology leadership. - Expanded share repurchase program to $200 million. - CTV, digital out of home, and retail media continue to expand and present healthy growth.

Revenue for the third quarter was $110.5 million, representing 8% year-over-year growth. Contribution ex TAC came in at $51 million, up 7% year over year, maintaining a 46% margin. Key growth engines: CTV revenue was up 75% year over year, digital out of home revenue increased by 26% year over year reaching 22% of revenue, retail media revenue was up 40% year over year. Web revenue declined by 11% year over year due to a continued trend of lower advertiser appetite for standard display and video formats.

• Reiterated full-year 2025 guidance with revenue at $430 million to $450 million and adjusted EBITDA at $44 million to $46 million. - Confident in meeting the guidance range as the quarter is in line with expectations and they see no slowdown in advertiser spend yet, especially with the holiday season approaching.

Q: Tal, dive into CTV strength drivers in Q3 with 75% growth and on guidance range given the wide range for Q4 and expectations for the holiday season?

A: Tal mentioned performance CTV with new algorithm GreenBits (now OutMAX) driving growth and Elad stated the quarter is in line with expectations and they feel confident in meeting the guidance as they see no slowdown in advertiser spend and it's the peak holiday season.

Q: Eric Martinuzzi asked about Q4 growth vs Q3 and 2026 growth expectations?

A: Elad said Q4 is a bit conservative as it's the peak holiday season but they aim to capture more market share in 2026 and expect to beat street expectations with growth engines outperforming the market.

Q: Jason Helfstein asked about sales/marketing investment and web business?

A: Elad said web and search trends with budgets shifting to closed gardens like CTV and out of home, and they plan to increase sales and marketing investments for next year to scale Perion One.

Q: Jeffrey Michael Martin asked about web comparison and TAM expansion?

A: Elad said web acted as expected with some low margin business exited, and Tal mentioned integrating new channels like YouTube and Meta into Perion One to expand TAM.

Q: Laura Martin asked about AI internal use and web structural decline?

A: Tal said R&D and sales are areas for hiring with more automation and AI in R&D, and Elad explained web decline is due to business actions taken in February and structural trends of human behavior shifting away from editorial web.

Q: Jason Kreyer asked about Soda and digital out of home revenue streams?

A: Tal said Soda and digital out of home player are operating systems for inventory parts, aiming to be implemented in tech stacks to increase TAM and provide more predictable revenue streams.