Perion reports overall revenue decline of 33% in 2024, however, DOOH revenue was up 50%

NEW YORK & TEL AVIV, Israel–Perion Network Ltd. (NASDAQ and TASE: PERI) has reported its financial results for the fourth quarter and full year ended December 31, 2024.

“I am encouraged by our fourth quarter results as we delivered continued growth in our DOOH and CTV channels, as well as in our Retail Media vertical, showing continued adoption of our technologies with retailers,” commented Tal Jacobson, Perion’s CEO. “All our growth engines have consistently outpaced the market on an annual basis, according to eMarketer2, and we believe they will continue to be the drivers of our future success”.

“Earlier this month, we announced our transformational ‘Perion One’ strategy and platform. This strategy will unify our brands and technologies into one advanced platform named ‘Perion One’, which will support our position as the partner of choice for brands, agencies, and retailers navigating the complexities of modern advertising. Perion One will harness advanced AI algorithms to help solve these challenges for our customers while aiming to optimize our cost structure and enhance our ability to scale in a more profitable way.”

“With the introduction of our Perion One strategy, we enhanced our leadership team, forming a strong and experienced management,” added Mr. Jacobson. “I am pleased to have Stephen Yap join our team as Perion’s Chief Revenue Officer to lead our global sales. Along with Kenny Lau, who was promoted to Perion’s Chief Product Officer, and Mina Naguib, who was promoted to Perion’s Chief Technology Officer, I am confident our entire talented leadership team will achieve our goals to become the technology partner for brands, retailers, and agencies.”

“As part of the new Perion One strategy, we are focusing on the more profitable solutions that align with our strategy. With a solid foundation backed by a robust balance sheet, we are well-positioned to pursue our growth ambitions. Our investments are laser-focused on expanding the Perion One platform, enriching it with technological solutions to drive future growth,” concluded Mr. Jacobson.

1 On a proforma basis
2 Market data according to eMarketer: Digital out of Home, CTV and omnichannel Retail Media ad spending, US

Fourth Quarter and Full Year 2024 Business Highlights

As part of the Company’s Perion One strategy and the new unified structure, Perion will modify the way it presents its KPIs and will start to provide a breakdown of its revenue by channels and their year-over-year growth, as well as the Retail Media vertical.

Revenue and Trends by Channel

Vertical – Retail Media²

• Q4: Revenue increased 34% year-over-year to $27.0 million, representing 26% of Advertising Solutions revenue compared to 17% last year.
• FY 2024: Revenue increased 62% year-over-year to $80.6 million, representing 24% of Advertising Solutions revenue compared to 12% last year.

Formats – Open Web Video³

• Q4: Revenue decreased 61% year-over-year, representing 13% of Advertising Solutions revenue, compared to 29% last year.
• FY 2024: Revenue decreased 61% year-over-year, representing 17% of Advertising Solutions revenue, compared to 36% last year.

¹ On a proforma basis
² Retail Media revenue includes all media channels, such as CTV, DOOH, video and others
³ Open Web video refers to standard digital video ad units running on the open web (Websites), and does not include CTV, digital video on social platforms and short-form video. Formats will not be a part of Perion’s reported KPIs going forward

Fourth Quarter 2024 Financial Highlights

Financial Outlook for Full-Year 2025²

2025 guidance reflects our commitment to continue building our Perion One platform while focusing on more profitable technologies and solutions that align with our strategy.

The Company is providing the following full-year 2025 guidance ranges based on current expectations:

• Revenue of $400 to $420 million
• Adjusted EBITDA¹ of $40 to $42 million
• Adjusted EBITDA¹ to contribution ex-TAC¹ of 22% at the midpoint

Share Repurchase program

As part of the company’s $75 million share repurchase program announced last year, in the fourth quarter of 2024, Perion repurchased 1.6 million shares in the amount of approximately $13.4 million. As of the end of the fourth quarter, the company repurchased a total of 5.2 million shares, bringing the total spend under the share repurchase program to $46.9 million.

¹ Contribution ex-TAC, non-GAAP Net Income, adjusted EBITDA, adjusted Free Cash Flow and non-GAAP Diluted EPS are non-GAAP measures. See below reconciliation of GAAP to non-GAAP measures
² Perion has not provided an outlook for GAAP Income from operations or reconciliation of Adjusted EBITDA guidance to GAAP Income from operations, the closest corresponding GAAP measure, because it does not provide guidance for certain of the reconciling items on a consistent basis due to the variability and complexity of these items, including but not limited to the measures and effects of stock-based compensation expenses directly impacted by unpredictable fluctuation in the share price and amortization in connection with future acquisitions. Hence, we are unable to quantify these amounts without unreasonable efforts.

Financial Comparison for the Fourth Quarter of 2024

Revenue: Revenue decreased by 45% to $129.6 million in the fourth quarter of 2024 from $234.2 million in the fourth quarter of 2023. Advertising Solutions revenue decreased 13% year-over-year, accounting for 80% of total revenue, primarily due to a 61% decrease in Video revenue, partially offset by a $23.6 million increase in Digital Out of Home revenue and a 10% year-over-year increase in CTV revenue to $15.8 million. Search Advertising revenue decreased by 78% year-over-year, accounting for 20% of revenue, following the previously announced changes implemented by Microsoft Bing in 2024.

Traffic Acquisition Costs and Media Buy (“TAC”): TAC amounted to $74.8 million, or 58% of revenue, in the fourth quarter of 2024, compared with $143.6 million, or 61% of revenue, in the fourth quarter of 2023. The margin expansion was primarily due to changes in the product mix, focusing on more profitable solutions.

GAAP Net Income: GAAP net income decreased by 87% to $4.9 million in the fourth quarter of 2024, compared with $39.4 million, in the fourth quarter of 2023.

Non-GAAP Net Income: Non-GAAP net income was $16.1 million, or 12% of revenue, in the fourth quarter of 2024, compared with $52.9 million, or 23% of revenue, in the fourth quarter of 2023. A reconciliation of GAAP to non-GAAP net income is included in this press release.

Adjusted EBITDA: Adjusted EBITDA was $15.5 million, or 12% of revenue (and 28% of Contribution ex-TAC) in the fourth quarter of 2024, compared with $53.9 million, or 23% of revenue (and 59% of Contribution ex-TAC) in the fourth quarter of 2023. A reconciliation of GAAP income from operations to Adjusted EBITDA is included in this press release.

Cash Flow from Operations: Net cash provided by operating activities in the fourth quarter of 2024 was $4.3 million, compared with $50.2 million in the fourth quarter of 2023.

Net cash: As of December 31, 2024, cash and cash equivalents, short-term bank deposits and marketable securities amounted to $373.3 million, compared with $472.7 million as of December 31, 2023.

Financial Comparison for the Full Year of 2024

Revenue: Revenue decreased by 33% to $498.3 million in 2024 from $743.2 million in 2023. Advertising Solutions revenue decreased 16%, accounting for 67% of total revenue, primarily due to a 61% decrease in Video revenue, partially offset by a $64.9 million increase in Digital Out of Home revenue and a 30% increase in CTV revenue to $43.6 million. Search Advertising revenue decreased by 53%, accounting for 33% of revenue, following the previously announced changes implemented by Microsoft Bing in 2024.

Traffic Acquisition Costs and Media Buy (“TAC”): TAC amounted to $286.0 million, or 57% of revenue, in 2024, compared with $432.9 million, or 58% of revenue, in 2023. The margin expansion was primarily due to changes in the product mix, focusing on more profitable solutions.

GAAP Net Income: GAAP net income decreased by 89% to $12.6 million in 2024, compared with $117.4 million in 2023.

Non-GAAP Net Income: Non-GAAP net income was $64.0 million, or 13% of revenue, in 2024, compared with $167.4 million, or 23% of revenue, in 2023. A reconciliation of GAAP to non-GAAP net income is included in this press release.

Adjusted EBITDA: Adjusted EBITDA was $50.9 million, or 10% of revenue (and 24% of Contribution ex-TAC) in 2024, compared with $169.1 million, or 23% of revenue (and 55% of Contribution ex-TAC) in 2023. A reconciliation of GAAP income from operations to Adjusted EBITDA is included in this press release.

Cash Flow from Operations: Net cash provided by operating activities in 2024 was $6.9 million, compared with $155.5 million in 2023.

Conference Call

Perion’s management will host a conference call to discuss the results at 8:30 a.m. ET today:

Registration link: https://perion-q4-24-earnings-call.open-exchange.net/

A replay of the call and a transcript will be available within approximately 24 hours of the live event on Perion’s website.

About Perion Network Ltd.

Perion is helping agencies, brands and retailers get better results with their marketing investments by providing advanced technology across digital channels. Through the Perion One platform, we are making digital advertising more effective by building solutions that continuously adapt to connect the dots between data, creative and channels.

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