UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

For the month of February 2021 (Report No. 1)

Commission File Number: 000-51694

(Translation of registrant's name into English)

1 Azrieli Center, Building A, 4th Floor

26 HaRokmim Street, Holon, Israel 5885849

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒   Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): N/A

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): N/A

Explanatory Note

On February 9, 2021, Perion Network Ltd. (the “Registrant” or “Perion”) issued a press release titled “Perion Reports 51% YoY Revenue Growth in 2020, Record Quarter Since Inception.” A copy of this press release is furnished as Exhibit 99.1 herewith.

The GAAP financial statements tables contained in the press release attached to this report on Form 6-K are incorporated by reference into the Registrant’s registration statements on Form F-3 (File No. 333-238020) and Form S-8 (File Nos. 333-133968, 333-152010, 333-171781, 333-188714, 333-192376, 333-193145, 333-203641, 333-208278, 333-216494, 333-237196 and 333-249846).

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: February 9, 2021

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Perion Reports 51% YoY Revenue Growth in 2020, Record Quarter Since Inception

Display and Social Advertising achieved 69% annual revenue growth, propelled by new interactive

Connected Television (iCTV) offering and Content Monetization solution

GAAP Net Income increased by 53% YOY during the fourth quarter to $9M

Tel Aviv & New York – February 9, 2021 – Perion Network Ltd. (NASDAQ: PERI), a global advertising technology company that delivers its Synchronized Digital Branding solution across the three main pillars of digital advertising – ad search, social media and display / video / CTV advertising – announced today its financial results for the fourth quarter and twelve months ended December 31, 2020.

 

 

 

 

 

 

 

 

 

Fourth Quarter and Full Year 2020 Results Summary*

 

(In millions, except per share data)

* Reconciliation of GAAP to Non-GAAP measures follows.

Doron Gerstel, Perion’s CEO, commented, “Perion closed 2020 delivering strong revenues and earnings that well exceeded our 2019 results. The effectiveness of our content monetization engine as a holistic, one-stop solution for brands and agencies, and the acceleration of our Connected TV advertising offering, were the main factors behind 25% revenue growth for the full year. Despite that travel advertisers that traditionally contribute 15% or $10 million in revenues in 2019  dramatically reduced their digital ad spend, we continued to drive healthy growth thanks to our diversification strategy, allowing us to capitalize on any shifting budget between the three main pillars of digital advertising: display, search and social.”

 

 “During the fourth quarter, we renewed and expanded our strategic partnership with Microsoft Bing for an additional four years,” Gerstel added. “The continuing collaboration with Microsoft is a significant factor in Perion’s multi-year strategic plan to achieve sustainable and highly profitable double-digit annual revenue growth, with a desired target of $500 million in annual revenue by 2023.”

 

“We enter 2021 in a strong position,” Gerstel concluded. “In January, we completed a follow-on public offering, which was both upsized and oversubscribed, generating net proceeds of more than $61 million. This successful transaction further solidifies our balance sheet and better positions Perion to capitalize on the growth opportunities in front of us as we prudently evaluate accretive and synergistic acquisitions to bolster our content monetization platform, expand our technology moat, and that are capable of driving predictable and profitable growth.”

 

Financial Comparison for the Fourth Quarter of 2020

 

 

Net Income: In the fourth quarter of 2020, GAAP net income was $9.0 million, or 8% of revenues, compared to the $5.9 million, or 8% of revenues in the fourth quarter of 2019.

 

Non-GAAP Net Income: In the fourth quarter of 2020, non-GAAP net income was $13.8 million, or 12% of revenues, compared to the $8.9 million, or 11% of revenues in the fourth quarter of 2019. A reconciliation of GAAP to non-GAAP net income is included in this press release.

Adjusted EBITDA: In the fourth quarter of 2020, Adjusted EBITDA was $15.3 million, or 13% of revenues, compared to $12.2 million, or 16% of revenues, in the fourth quarter of 2019. A reconciliation of GAAP Net Income to Adjusted EBITDA is included in this press release.

Cash and Cash Flow from Operations: As of December 31, 2020, cash and cash equivalents and short-term bank deposits were $60.4 million. Cash provided from operations in the fourth quarter of 2020 was $12.8 million, compared to $11.2 million in the fourth quarter of 2019.

Financial Comparison for the full year of 2020

 

Customer Acquisition Costs and Media Buy (“CAC”): CAC in 2020 were $197.6 million, or 60% of revenues, as compared to $135.9 million, or 52% of revenues, in 2019. The increase as a percentage of revenues is primarily due to the acquisitions of Content IQ and Pub Ocean, as well as product mix.

 

Net Income: During 2020, GAAP net income was $10.2 million, or 3% of revenues, compared to the $12.9 million, or 5% of revenues in 2019.

 

Non-GAAP Net Income: During 2020, Non-GAAP net income was $26.6 million, or 8% of revenues, compared to the $21.6 million, or 8% of revenues in 2019.

 

Adjusted EBITDA: In 2020, Adjusted EBITDA was $32.8 million, or 10% of revenues, compared to $32.4 million, or 12% of revenues in 2019.

 

Cash Flow from Operations: Cash provided from operations in 2020 decreased by 51%, from $44.7 million in 2019 to $22.0 million in 2020, the primary reason for the decrease compared to the prior year is mainly due to working capital needs of approximately $10 million in connection with the acquisitions of Content IQ and Pub Ocean.

 

Outlook

In 2021, management expects to generate revenue of $350 to $370 million and Adjusted EBITDA of $35 million to $37 million. The mid-point of the guidance range reflects 10% growth and 10% Adjusted EBITDA margin.

Conference Call

Perion will host a conference call to discuss the results today, Tuesday, February 9, 2021 at 8:30 a.m. ET. Details are as follows:

About Perion Network Ltd.

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 share-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 changes in fair value of earnout contingent consideration. The Company excludes from its GAAP financial measures the fair value revaluations of both, the convertible bonds and the related derivative instrument, and by doing so, the non-GAAP measures reflect the Company’s results as if the convertible bonds were originally issued and denominated in US dollars, which is the Company’s functional currency. 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, acquisition related expenses, gains and losses recognized on changes in the fair value of contingent consideration arrangements.

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 Securities and Exchange Commission from time to time, including its annual report on Form 20-F for the year ended December 31, 2019 filed with the SEC on March 16, 2020. Perion does not assume any obligation to update these forward-looking statements.

Contact Information:

Perion Network Ltd.

Rami Rozen, VP of Investor Relations

+972 (52) 5694441

ramir@perion.com

Source: Perion Network Ltd.

 

 

 

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