• Revenue: $108.7 million, a decrease of 39% year over year.

• Adjusted EBITDA: $7.7 million, a decrease of 81% year over year, with a 7% adjusted EBITDA margin.

• GAAP Net Loss: $6.2 million.

• Non-GAAP Net Income: $13.4 million, a decrease of 68% year over year.

• Net Cash: $407.1 million.

• Advertising Solutions Revenue: $74.4 million, a decrease of 25% year over year.

• CTV Revenue: $10.2 million, a growth of 42% year over year.

• Digital Out-of-Home Revenue: $13 million, a growth of 41% year over year on a pro forma basis.

• Retail Media Revenue: $17.6 million, a growth of 75% year over year.

• Search Advertising Revenue: $34.3 million, a decrease of 57% year over year.

• Operating Cash Flow: Negative $20.5 million, impacted by a delay in Microsoft collection and a one-time contingent consideration payment.

• Warning! GuruFocus has detected 6 Warning Signs with PERI.

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 (NASDAQ:PERI) 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.