Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Perion Network Ltd (PERI, Financial) made significant advancements in its technologies, securing key integrations and partnerships to enhance its solutions.
- The company's programmatic digital out-of-home business grew by 41% year over year, outpacing market expectations.
- Perion's CTV business experienced a 42% year-over-year growth, more than doubling the market growth rate.
- Retail media vertical delivered consistent growth, increasing 75% year over year, significantly outperforming market growth estimates.
- Perion's strong balance sheet and cash position allow for continued organic investments in technology and execution of its M&A strategy.
Negative Points
- Revenue for the second quarter was $108.7 million, a decrease of 39% year over year, primarily impacted by declines in search and standard open web video and display.
- Adjusted EBITDA decreased by 81% year over year, resulting in a 7% adjusted EBITDA margin.
- The company reported a GAAP net loss of $6.2 million for the quarter.
- Second-quarter search advertising revenue decreased by 57% year over year due to changes in Microsoft's advertising pricing mechanisms.
- Operating cash flow for the second quarter was negative $20.5 million, impacted by a delay in Microsoft collection and a one-time contingent consideration payment.
Q & A Highlights
Q: Do you think take rate is the right pricing model, or should you pivot to an agency type of professional services or billable hour model?
A: Tal Jacobson, CEO: We aim to transition from being an advertising company to a technology company, focusing on providing technology solutions rather than acting as an agency. We believe making money from a cut of what we provide to clients, such as advertising, aligns with our strategy.
Q: Did closing Content IQ have an impact on open web video in the quarter?
A: Maoz Sigron, CFO: We made changes, including in CIQ, and are no longer running owned and operated websites. We now use the technology for other business needs, reducing our impact from this part of the business.
Q: With the stock down and cash flow negative, what are your M&A goals?
A: Tal Jacobson, CEO: We are generating positive cash flow and are focused on acquiring profitable, technology-focused companies. Our last M&A helped us gain meaningful technology, and we plan to continue this strategy.
Q: Can you discuss SORT adoption given Google's decision to keep cookies?
A: Tal Jacobson, CEO: SORT remains relevant, especially with CTV integration. Our technology allows targeting across multiple channels, and we are integrated with third-party solutions. The omnichannel approach is key, as not all channels rely on cookies.
Q: What are your expectations for cash generation in the second half of 2024?
A: Maoz Sigron, CFO: We expect cash flow to align with EBITDA projections for H2, moving back to normal levels after addressing specific quarter impacts.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
