Perion Network Ltd ((PERI)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Perion Network Ltd’s recent earnings call painted a picture of both growth and challenges. The sentiment was generally positive, with strong growth in digital out-of-home and retail media segments, successful integration of acquisitions, and robust cash flow. However, the company faced challenges in the CTV segment, with a decline in revenue and increased costs impacting profitability. Despite these hurdles, Perion’s strategic initiatives and cash flow generation provide a promising outlook.
Advertising Solutions Return to Growth
Perion Network Ltd reported an 8% year-over-year increase in Advertising Solutions revenue, marking a return to growth for the first time since Q3 2023. This growth was primarily driven by advancements in digital out-of-home, retail media, and web sectors.
Digital Out-of-Home Growth
The digital out-of-home segment recorded an impressive 35% year-over-year growth. This expansion was supported by strategic global partnerships, highlighting the company’s commitment to broadening its market reach.
Retail Media Vertical Expansion
Retail media showed significant growth, generating $22.3 million in Q2, which represents a 27% year-over-year increase. This vertical continues to be a key driver of Perion’s overall revenue growth.
Successful Integration of Greenbids
The integration of Greenbids is progressing well, contributing to new synergies and over $1 million in Perion Algo deals from existing customers. This successful integration is expected to enhance the company’s operational efficiency and market presence.
Strong Cash Flow and Share Buyback
Perion demonstrated strong cash generation with an operating cash flow of $21.3 million. Additionally, the company utilized $33.4 million for share repurchase, indicating a commitment to returning value to shareholders.
CTV Revenue Decline
The CTV segment faced a 5% year-over-year revenue decline, attributed to budget reallocations to the latter half of the year. This decline poses a challenge, but the company remains optimistic about future growth in this area.
Increased Cost of Revenue
The cost of revenue saw a 15% increase, outpacing revenue growth. This rise was linked to the expansion in retail media and hosting services, impacting the company’s profitability.
GAAP Net Loss
Perion reported a GAAP net loss of $3.5 million, or $0.08 per diluted share, an improvement compared to a net loss of $6.2 million in the same quarter last year. This reduction in net loss indicates a positive trend in managing financial challenges.
Forward-Looking Guidance
During the earnings call, Perion reaffirmed its guidance for the full year 2025, expecting revenue between $430 million to $450 million and adjusted EBITDA between $44 million to $46 million. The company remains optimistic about annual growth, particularly in the digital out-of-home and retail media segments, despite the challenges in the CTV sector.
In conclusion, Perion Network Ltd’s earnings call reflected a generally positive sentiment with strong growth in key areas and strategic initiatives that promise a bright future. While challenges in the CTV segment and increased costs were noted, the company’s robust cash flow and successful integration of acquisitions provide a solid foundation for continued growth.