Perion(PERI) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $89.3 million, exceeding initial expectations due to strong performance in CTV and digital out of home channels [18] - Adjusted EBITDA for Q1 2025 was$ 1.8 million, also higher than expectations, reflecting operational control and margin discipline [19] - On a GAAP basis, the net loss for Q1 2025 was $8.3 million, compared to a net income of$ 11.8 million in Q1 2024 [23] - Non-GAAP net income for Q1 2025 was $5.4 million, down from$ 22.6 million in Q1 2024 [23] - Cash position remains strong with nearly $360 million in net cash [19] Business Line Data and Key Metrics Changes - Digital out of home revenue grew by 80% year over year, now representing 19% of total revenue, up from 6% last year [21] - CTV revenue increased by 31% year over year, representing 12% of total revenue compared to 5% last year [21] - Retail media vertical grew by 33% year over year, outperforming the broader market [17] - Web revenue declined by 28% year over year, now representing 46% of total revenue compared to 37% in the same quarter last year [21] Market Data and Key Metrics Changes - The company noted a healthy pipeline going into the rest of 2025, contributing to the stabilization of web revenue [34] - The acquisition of GreenBids is expected to expand the total addressable market into new lower funnel performance opportunities [26] Company Strategy and Development Direction - The company is focused on building Perion One as an outcome-driven platform to create long-term value for CMOs and shareholders [6] - The acquisition of GreenBids is seen as a significant leap forward, enhancing technology and expanding capabilities in walled garden platforms [12][26] - The company is committed to investing in customers, people, and technology to drive long-term value [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to return to a high cash flow conversion rate and maintain a strong financial position [24] - The guidance for full year 2025 has been raised, reflecting improved outlook and stronger market position [28] - Management highlighted the importance of performance-based campaigns in the current market environment [63] Other Important Information - The company has expanded its share repurchase program to$ 125 million, reinforcing long-term confidence in its value [25] - The integration of GreenBids technology into Perion One is expected to happen immediately, with significant contributions anticipated in 2026 [45] Q&A Session Summary Question: What factors contributed to the increased guidance? - Management indicated that strong Q1 performance and the acquisition of GreenBids allowed for the increase in guidance, with a healthy pipeline contributing to future growth [34] Question: What is the expected impact of the GreenBids acquisition on revenue? - Management stated that while GreenBids is already profitable, the full impact of the acquisition will be seen in 2026, with synergies contributing to growth [40][41] Question: How is the message of the PerionOne platform being received by CMOs? - Management reported positive responses from CMOs regarding the unified offering and the custom algorithm through AI, indicating a strong market need [52] Question: What is the strategy to capitalize on the expanded total addressable market? - Management emphasized the importance of performance-based campaigns and the ability to reduce waste in advertising spend, which aligns with current market trends [59][63]