Perion’s Momentum Continues, Delivering 119% Year-Over-Year Net Income

Growth in the Fourth Quarter 2022; Diluted EPS of $0.79

 

2022 revenue increased by 34% year-over-year, net income grew by 156% to $99 million; diluted

EPS doubled to $2.06 and adjusted EBITDA increased by 90% to $132 million

Tel Aviv & New York – February 8, 2023 – Perion Network Ltd. (NASDAQ & TASE: PERI), a global advertising technology company whose synergistic solutions are delivered across the three primary channels of digital advertising – ad search, social media and display/video/CTV advertising – today reported record financial results for the fourth quarter and full year period ending December 31, 2022.

 

“Perion operates in a dynamic digital advertising market, and our strong financial performance is a clear indication of our unique capability to identify shifts in ad spending, delivering the right solutions at the right time,” said Doron Gerstel, Perion’s CEO. “A three-year EBITDA CAGR of 101% and revenue CAGR of 40% demonstrates the high level of predictability and sustainability of our business model, underpinned by our diversification and profitability-biased strategy. By connecting all our data assets across all media channels on both sides of the open web into an intelligent central hub (iHUB), we’re able to rapidly analyze changes in consumer behavior and shift our business to where media budgets are trending, while consistently delivering superior return on advertising spend to our clients and increasing our profit margins.”

 

“I’d like to stress that the consistency of our performance over the past three years is even more impressive when you consider the unprecedented volatility presented by the global pandemic, supply chain distortions, interest rate increases, and the resultant emotional swings among advertisers and brands,” added Mr. Gerstel.

 

Full-Year 2022 Business Highlights

 

 

 

 

 

 

 

 

Fourth Quarter 2022 Business Highlights

 

 

 

 

 

 

 

 

 

Fourth Quarter 2022 Financial Highlights⁽¹⁾

 

In millions, except per share data		Three months ended												Year ended
		December 31,												December 31,
		2022				2021				%				2022				2021				%
Display Advertising Revenue		$	123.8			$	100.2				+24	%		$	360.7			$	265.3				+36	%
Search Advertising Revenue		$	85.9			$	57.8				+49	%		$	279.6			$	213.2				+31	%
Total Revenue		$	209.7			$	158.0				+33	%		$	640.3			$	478.5				+34	%
GAAP Net Income		$	38.7			$	17.7				+119	%		$	99.2			$	38.7				+156	%
Non-GAAP Net Income		$	44.7			$	25.3				+77	%		$	119.8			$	60.0				+100	%
Adjusted EBITDA		$	48.2			$	28.9				+67	%		$	132.4			$	69.6				+90	%
Adjusted EBITDA to Revenue ex-TAC			55	%			45	%							49	%			37	%
Net Cash from Operations		$	38.2			$	28.8				+32	%		$	122.1			$	71.1				+72	%
GAAP Diluted EPS		$	0.79			$	0.44				+80	%		$	2.06			$	1.02				+102	%
Non-GAAP Diluted EPS		$	0.90			$	0.62				+45	%		$	2.47			$	1.57				+57	%

⁽¹⁾ See below reconciliation of GAAP to Non-GAAP measures

Outlook for 2023

 

Mr. Gerstel concluded, “We expect the strong business momentum to carry on in 2023. We will continue to execute our strategy, harnessing our innovative capabilities and our efficiency measures to further drive growth and high profitability.”

 

In millions
	2022		2023 Guidance		YoY Growth %1
Revenue	$640.3		$720-$740		14%1
Adjusted EBITDA	$132.4		$149-$153		14%1
Adjusted EBITDA to Revenue	21%		21%1
Adjusted EBITDA to Revenue ex-TAC	49%		50%1

⁽¹⁾ Calculated at guidance midpoint

 

Financial Comparison for the Full-Year of 2022

 

Adjusted EBITDA: Adjusted EBITDA was $132.4 million, or 21% of revenue (and 49% of revenue ex-TAC), compared with $69.6 million, or 15% of revenue (and 37% of revenue ex-TAC) in 2021. 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, 2022, cash and cash equivalents and short-term bank deposits amounted to $429.6 million. Net cash provided by operating activities in 2022 was $122.1 million, a 72% increase compared with $71.7 million in 2021.

 

Financial Comparison for the Fourth Quarter of 2022

 

Net Income: On a GAAP basis, net income increased by 119% to $38.7 million in the fourth quarter of 2022  from $17.7 million in the fourth quarter of  2021. Non-GAAP net income was $44.7 million, or 21% of revenue, compared with $25.3 million, or 16% of revenue, in the fourth quarter of 2021. A reconciliation of GAAP to non-GAAP net income is included in this press release.

 

Adjusted EBITDA: Adjusted EBITDA was $48.2 million, or 23% of revenue (and 55% of revenue ex-TAC), compared with $28.9 million, or 18% of revenue (and 45% of revenue ex-TAC) in the fourth quarter of 2021. A reconciliation of GAAP Net Income to Adjusted EBITDA is included in this press release.

 

Cash and Cash Flow from Operations: Net cash provided by operating activities in the fourth quarter of 2022 was $38.2 million, a 32% increase compared with $28.8 million in the fourth quarter of 2021.

 

Conference Call

 

Perion will host a conference call to discuss the results at 8:30 a.m. ET today. A replay and a transcript will be available within approximately 24 hours of the live event on Perion’s website.

 

Call details:

 

 

 

 

About Perion Network Ltd.

 

Perion is a global advertising technology company whose synergistic solutions are delivered across the three primary channels of digital advertising – ad search, social media and display / video / CTV advertising. These channels are brought together by Perion’s intelligent Hub, which integrates the company’s business assets from both sides of the open Web, providing significant benefit to its brands and publisher customers.

 

For more information, visit Perion's website at www.perion.com.

 

 

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 changes in fair value of earnout contingent consideration. 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, acquisition related expenses, gains and losses recognized on changes in the fair value of contingent consideration arrangements. Revenue excluding Traffic Acquisition Costs (“Revenue ex-TAC”) presents revenue reduced by traffic acquisition costs, reflecting that a portion of our revenue must be directly passed to publishers or advertisers and presents our revenue excluding such items.

 

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. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these projected measures, together with some of the excluded information not being ascertainable or accessible, we are unable to quantify certain amounts that would be required for such presentation without unreasonable effort. Consequently, no reconciliation of the forward-looking non-GAAP financial measures is included. 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”, “estimate” 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, changes in applicable laws and regulations as well as industry self-regulation, data breaches, cyber-attacks and other similar incidents, 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, 2021 filed with the SEC on March 16, 2022. Perion does not assume any obligation to update these forward-looking statements.

 

Contact Information:

 

Perion Network Ltd.

Dudi Musler, VP of Investor Relations

+972 (54) 7876785

dudim@perion.com

Source: Perion Network Ltd.

 

 

 

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