Perion Delivers 82% Year Over Year Growth in the Second Quarter of 2021; Introduces 2022 Guidance Encouraged by Improved Visibility
Results include 211% advertising growth and strong margin
Management expects to achieve over
TEL AVIV &
Second Quarter 2021 Highlights
- Advertising revenue growth of 211% (or 134% on pro forma basis) fueled by broad-based adoption of our video and CTV offerings, leading to an increase of average campaign spend by 58% and a 67% increase in number of clients;
- Search advertising revenue growth of 24%, primarily driven by increased performance advertising spend by brands;
- The inherent and strategically constructed operating leverage in our business model increased adjusted EBITDA margin to 33% of revenue excluding traffic acquisitions costs compared to 10% in the second quarter of 2020; and
-
Net cash provided by operating activities was
$14.6 million ; Perion has$141 million in cash and zero debt as ofJune 30, 2021 .
Second Quarter 2021 Financial Highlights*
(In millions, except per share data)
|
Three months ended |
|
Six months ended |
|
||||||||||||
|
|
|
|
|
||||||||||||
|
2021 |
|
2020 |
|
% |
|
2021 |
|
2020 |
|
% |
|
||||
Display and |
$ |
58.0 |
|
$ |
18.7 |
|
+211% |
|
$ |
96.2 |
|
$ |
42.4 |
|
+127% |
|
|
$ |
51.6 |
|
$ |
41.7 |
|
+24% |
|
$ |
103.3 |
|
$ |
84.0 |
|
+23% |
|
Total Revenues |
$ |
109.7 |
|
$ |
60.3 |
|
+82% |
|
$ |
199.5 |
|
$ |
126.4 |
|
+58% |
|
GAAP Net Income (loss) |
$ |
7.1 |
|
$ |
(2.2) |
|
+416% |
|
$ |
10.4 |
|
$ |
(0.9) |
|
+1,248% |
|
Non-GAAP Net Income |
$ |
12.3 |
|
$ |
1.9 |
|
+536% |
|
$ |
19.3 |
|
$ |
6.9 |
|
+180% |
|
Adjusted EBITDA |
$ |
14.3 |
|
$ |
2.5 |
|
+479% |
|
$ |
23.1 |
|
$ |
8.7 |
|
+165% |
|
Adjusted EBITDA/Revenue Ex TAC |
|
33% |
|
|
10% |
|
|
|
|
29% |
|
|
16% |
|
|
|
Net cash provided by operating activities |
$ |
14.6 |
|
$ |
0.2 |
|
+9,585% |
|
$ |
28.1 |
|
$ |
2.6 |
|
+961% |
|
GAAP Diluted Earnings (loss) Per Share |
$ |
0.19 |
|
$ |
(0.08) |
|
+338% |
|
$ |
0.29 |
|
$ |
(0.03) |
|
+1,067% |
|
Non-GAAP Diluted Earnings Per Share |
$ |
0.33 |
|
$ |
0.07 |
|
+371% |
|
$ |
0.53 |
|
$ |
0.24 |
|
+121% |
|
* Reconciliation of GAAP to Non-GAAP measures follows.
Financial Comparison for the Second Quarter of 2021
Revenues: Revenues increased by 82% (or 65% on a pro forma basis), from
Traffic Acquisition Costs (“TAC”): During the second quarter of 2021 TAC were
Net Income: On a GAAP basis, net income increased by 416% from a net loss of
Non-GAAP Net Income: In the second quarter of 2021, non-GAAP net income was
Adjusted EBITDA: In the second quarter of 2021, Adjusted EBITDA was
Cash and Cash Flow from Operations: As of
Outlook
Perion is narrowing it’s 2021 guidance and expects revenues to be between
($M)
|
2021 Guidance |
YoY Growth % |
2022 Guidance |
YoY Growth % |
Revenue |
|
28%* |
|
20%* |
Adjusted EBITDA |
|
54%* |
|
20%* |
EBITDA to REV Ex TAC |
30%* |
|
30%* |
|
* At guidance midpoint
Conference Call
Perion will host a conference call to discuss the results today,
- Conference ID: 9985661
-
Dial-in number from within
the United States : 1-866-548-4713 -
Dial-in number from
Israel : 1809 212 883 - Dial-in number (other international): 1-323-794-2093
-
Playback available until
Tuesday, August 10, 2021 by calling 1-844-512-2921 (United States ) or 1-412-317-6671 (international). Please use PIN code 9985661 for the replay. - Link to the live and archived webcast accessible at https://www.perion.com/ir-info/
About
Perion is a global technology company that delivers strategic business solutions that enable brands and advertisers to efficiently “Capture and Convince” users across multiple platforms and channels, including interactive connected television – or iCTV. Perion achieves this through its Synchronized Digital Branding capabilities, which are focused on high impact creative; content monetization; its branded search network, in partnership with Microsoft Bing; and social media management that orchestrates and optimizes paid advertising. This diversification positions Perion for growth as budgets shift across categories.
Non-GAAP measures
Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude stock-based compensation expenses, retention and acquisition related expenses, revaluation of acquisition related contingent consideration, amortization of acquired intangible assets and the related taxes thereon, non-recurring expenses, foreign exchange gains (losses) associated with ASC-842, as well as certain accounting entries under the business combination accounting rules that require us to recognize a legal performance obligation related to revenue arrangements of an acquired entity based on its fair value at the date of acquisition. Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") is defined as operating income excluding stock-based compensation expenses, depreciation, acquisition related items consisting of amortization of intangible assets and goodwill and intangible asset impairments, acquisition related expenses, gains and losses recognized on changes in the fair value of contingent consideration arrangements and certain accounting entries under the business combination accounting rules that require us to recognize a legal performance obligation related to revenue arrangements of an acquired entity based on its fair value at the date of acquisition.
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. A reconciliation between results on a GAAP and non-GAAP basis is provided in the last table of this press release.
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” 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, among others, 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, unpredictable sales cycles, competitive pressures, market acceptance of new products, 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
CONSOLIDATED STATEMENTS OF OPERATIONS
In thousands (except share and per share data)
Three months ended |
|
Six months ended |
||||||
|
|
|
||||||
2021 |
|
2020 |
|
2021 |
|
2020 |
||
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
||
Revenues: |
||||||||
Display and |
|
|
|
|
||||
|
51,648 |
41,667 |
103,328 |
83,987 |
||||
Total Revenues |
109,677 |
60,341 |
199,494 |
126,394 |
||||
Costs and Expenses: |
||||||||
Cost of revenues |
6,159 |
4,880 |
11,595 |
10,646 |
||||
Traffic acquisition costs and media buy |
66,226 |
36,801 |
121,086 |
72,939 |
||||
Research and development |
8,928 |
7,122 |
17,473 |
14,329 |
||||
Selling and marketing |
12,879 |
8,219 |
23,484 |
17,920 |
||||
General and administrative |
4,629 |
3,581 |
8,760 |
7,520 |
||||
Depreciation and amortization |
2,000 |
2,251 |
4,377 |
4,553 |
||||
Total Costs and Expenses |
100,821 |
62,854 |
186,775 |
127,907 |
||||
Income (loss) from Operations |
8,856 |
(2,513) |
12,719 |
(1,513) |
||||
Financial expense, net |
298 |
741 |
105 |
733 |
||||
Income (loss) before Taxes on income |
8,558 |
(3,254) |
12,614 |
(2,246) |
||||
Taxes on income (benefit) |
1,475 |
(1,015) |
2,225 |
(1,341) |
||||
Net Income (loss) |
|
|
|
|
||||
Net Earnings (loss) per Share |
||||||||
Basic |
|
|
|
|
||||
Diluted |
|
|
|
|
||||
Weighted average number of shares |
||||||||
Basic |
34,074,321 |
26,629,654 |
33,116,072 |
26,546,844 |
||||
Diluted |
37,085,265 |
26,629,654 |
36,289,802 |
26,546,844 |
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands
|
|
|
|
|
|
2021 |
|
2020 |
|
|
|
(Unaudited) |
|
(Audited) |
ASSETS |
|
|
|
|
Current Assets: |
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
Restricted cash |
1,222 |
|
1,222 |
|
Short-term bank deposits |
83,000 |
|
12,700 |
|
Accounts receivable, net |
67,641 |
|
81,221 |
|
Prepaid expenses and other current assets |
6,432 |
|
4,560 |
Total Current Assets |
216,449 |
|
147,359 |
|
|
|
|
|
|
Long-Term Assets: |
|
|
|
|
|
Property and equipment, net |
5,463 |
|
6,770 |
|
Operating lease right-of-use assets |
13,936 |
|
20,266 |
|
|
173,981 |
|
176,679 |
|
Deferred taxes |
6,788 |
|
7,111 |
|
Other assets |
346 |
|
496 |
|
Total Long-Term Assets |
200,514 |
|
211,322 |
Total Assets |
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
Current Liabilities: |
|
|
|
|
Accounts payable |
|
|
|
|
|
Accrued expenses and other liabilities |
17,902 |
|
21,188 |
|
Short-term operating lease liability |
4,395 |
|
4,514 |
|
Short-term loans and current maturities of long-term loans |
- |
|
8,333 |
|
Deferred revenues |
4,317 |
|
5,711 |
|
Short-term payment obligation related to acquisitions |
30,192 |
|
7,869 |
Total Current Liabilities |
131,947 |
|
120,113 |
|
|
|
|
|
|
Long-Term Liabilities: |
|
|
|
|
|
Payment obligation related to acquisition |
5,059 |
|
30,035 |
|
Long-term operating lease liability |
11,271 |
|
17,698 |
|
Other long-term liabilities |
7,445 |
|
6,713 |
Total Long-Term Liabilities |
23,775 |
|
54,446 |
|
Total Liabilities |
155,722 |
|
174,559 |
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
Ordinary shares |
287 |
|
224 |
|
Additional paid-in capital |
318,690 |
|
251,933 |
|
|
(1,002) |
|
(1,002) |
|
Accumulated other comprehensive gain |
22 |
|
112 |
|
Accumulated deficit |
(56,756) |
|
(67,145) |
Total Shareholders' Equity |
261,241 |
|
184,122 |
|
Total Liabilities and Shareholders' Equity |
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
In thousands
|
Three months ended |
Six months ended |
||||||
|
|
|
|
|||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
|
||||||||
Cash flows from operating activities: |
||||||||
Net Income (loss) |
|
|
|
|
||||
Adjustments required to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
2,000 |
2,251 |
4,377 |
4,553 |
||||
Stock-based compensation expense |
1,234 |
841 |
1,989 |
1,941 |
||||
Foreign currency translation |
31 |
(18) |
(89) |
(47) |
||||
Accrued interest, net |
(92) |
- |
(167) |
- |
||||
Deferred taxes, net |
59 |
(1,637) |
295 |
(1,952) |
||||
Accrued severance pay, net |
89 |
8 |
198 |
33 |
||||
Loss (gain) from sale of property and equipment |
(10) |
84 |
(11) |
84 |
||||
Net changes in operating assets and liabilities |
4,231 |
861 |
11,115 |
(1,060) |
||||
Net cash provided by operating activities |
|
|
|
|
||||
|
||||||||
Cash flows from investing activities: |
||||||||
Purchases of property and equipment, net of sales |
(211) |
(41) |
(355) |
(113) |
||||
Short-term deposits, net |
(27,000) |
(9,124) |
(70,300) |
6,362 |
||||
Cash paid in connection with acquisitions, net of cash acquired |
(3,438) |
(1,045) |
(3,438) |
(16,145) |
||||
Obligation in connection with acquisitions |
- |
(3,428) |
- |
2,349 |
||||
Net cash used in investing activities |
|
|
|
|
||||
|
||||||||
Cash flows from financing activities: |
||||||||
Issuance of shares in private placement, net |
- |
- |
60,960 |
- |
||||
Proceeds from exercise of stock-based compensation |
2,170 |
184 |
3,871 |
1,741 |
||||
Repayment of long-term loans |
- |
(2,083) |
(8,333) |
(4,166) |
||||
Net cash provided by (used in) financing activities |
|
|
|
|
||||
|
||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash |
9 |
(1) |
(3) |
(73) |
||||
Net increase (decrease) in cash and cash equivalents and restricted cash |
(13,845) |
(15,387) |
10,498 |
(7,398) |
||||
Cash and cash equivalents and restricted cash at beginning of period |
73,221 |
47,594 |
48,878 |
39,605 |
||||
Cash and cash equivalents and restricted cash at end of period |
|
|
|
|
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
In thousands (except share and per share data)
Three months ended |
|
Six months ended |
||||||
|
|
|
||||||
2021 |
|
2020 |
|
2021 |
|
2020 |
||
(Unaudited) |
|
(Unaudited) |
||||||
GAAP Net Income (loss) |
|
|
|
|
||||
Stock-based compensation |
1,234 |
841 |
1,989 |
1,941 |
||||
Amortization of acquired intangible assets |
1,356 |
1,094 |
2,698 |
2,159 |
||||
Retention and other related to M&A related expenses |
2,178 |
1,885 |
3,966 |
3,721 |
||||
Foreign exchange losses (gains) associated with ASC-842 |
105 |
201 |
(213) |
(79) |
||||
Revaluation of acquisition related contingent consideration |
170 |
282 |
339 |
282 |
||||
Taxes on the above items |
197 |
(127) |
146 |
(217) |
||||
Non-GAAP Net Income |
|
|
|
|
||||
Non-GAAP Net Income |
|
|
|
|
||||
Taxes on income |
1,278 |
(888) |
2,079 |
(1,124) |
||||
Financial expense (income), net |
23 |
258 |
(21) |
530 |
||||
Depreciation |
644 |
1,157 |
1,679 |
2,394 |
||||
Adjusted EBITDA |
|
|
|
|
||||
Non-GAAP diluted earnings per share |
|
|
|
|
||||
Shares used in computing non-GAAP diluted earnings per share |
37,429,049 |
28,545,484 |
36,576,534 |
28,796,194 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210803005532/en/
+972 (52) 5694441
ramir@perion.com
Source:
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