Perion Network Adjusts Financial Projections Due to Microsoft Bing Changes

Perion Network Revises Financial Projections Amid Changes with Microsoft Bing

June 10, 2024

NEW YORK & TEL AVIV—Perion Network Ltd. (NASDAQ & TASE: PERI), a company specializing in digital advertising technologies, has updated its financial projections for the second quarter and full year of 2024. Perion’s adjustments follow Microsoft Bing’s recent decision to remove several publishers from its search distribution marketplace, affecting multiple partners, including Perion.

Due to this action and prior adjustments in advertising pricing and mechanisms by Microsoft Bing, Perion anticipates that revenue from the partnership with Microsoft Bing will comprise less than 5% of its total revenue in the latter half of 2024. This development diminishes the material significance of the Microsoft Bing agreement for Perion, which has already been seeking to diversify its search engine partnerships.

Furthermore, alongside their diminished projections attributed to Microsoft Bing’s decision, Perion has reported a decline in revenue from standard video and display advertising formats. According to Perion, this trend aligns with broader market conditions and reflects a strategic pivot towards higher-value premium advertising formats, which offer a better return on investment for advertisers. However, the gains from these premium formats have not yet compensated for the loss in standard advertising revenue.

Perion’s CEO, Tal Jacobson, addressed the issue: “The recent changes Microsoft Bing implemented to its Search distribution marketplace are unfortunate and significantly impacted our Search Advertising business. Nonetheless, Perion remains committed to expanding our AI-driven Advertising Solutions business through product innovation and partnerships. We are focusing on expanding our growth engines into more countries, particularly in sectors like Connected TV (CTV), Retail Media, and programmatic Digital Out-of-Home (DOOH) advertising, which present substantial opportunities given their global growth rates.”

Jacobson also highlighted the company’s dedication to enhancing shareholder value by utilizing its solid financial position to invest in technology, acquire complementary solutions, and execute a $75 million stock buyback program that has already commenced.

Updated Financial Guidance

Perion has recalibrated its second-quarter and full-year 2024 financial projections as follows:

Q2 2024 Guidance:
– Revenue between $106 million and $108 million
– Adjusted EBITDA: $6.5 million to $7.5 million
– Adjusted EBITDA to Contribution ex-TAC ratio of 14% at the midpoint

FY 2024 Guidance:
– Revenue between $490 million and $510 million
– Adjusted EBITDA: $48 million to $52 million
– Adjusted EBITDA to Contribution ex-TAC ratio of 23% at the midpoint

Background on Perion Network Ltd.

Perion Network Ltd. provides technological solutions designed to connect advertisers with consumers across various major digital channels. The company employs cross-channel creative and technological strategies aimed at enabling brands to maintain a strong presence throughout the consumer journey, both online and offline. Perion’s focus extends to building an advertiser-centric ecosystem that prioritises significant benefits for both brands and publishers.

Forward-Looking Statements

The company’s forward-looking statements are subject to inherent risks and uncertainties, which may result in actual outcomes differing materially from current expectations. These risks include but are not limited to integration challenges from acquisitions, market volatility, data breaches, and compliance with changing regulations. These and other risks are detailed in Perion’s reports filed with the SEC. Perion does not assume any obligation to update its forward-looking statements.

For further queries, contact Dudi Musler, VP of Investor Relations at Perion Network Ltd.