Core Viewpoint - Perion Network Ltd. has filed its annual report on Form 20-F for the fiscal year ended December 31, 2025, with the U.S. Securities and Exchange Commission, highlighting its commitment to transparency and regulatory compliance [1][2]. Financial Performance - The annual report includes audited consolidated financial statements for the year ended December 31, 2025, which are now accessible on the company's website [2]. - The fourth-quarter performance showed a 19% year-over-year increase in Contribution ex-TAC and a 53% surge in Adjusted EBITDA, indicating strong operational growth [10]. Company Overview - Perion is recognized as a leader in advanced technology, focusing on redefining advertising through AI-native infrastructure, which facilitates real-time media execution across various platforms [4]. - The company employs over 650 individuals and is headquartered in Tel Aviv, Israel [7]. Product Development - Perion has launched its proprietary Outmax AI agent for TikTok, which is expected to enhance media performance by up to 25% based on early results, expanding its capabilities in the rapidly growing advertising platform [8].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date o ...

Group 1 - Perion Network (PERI) is undergoing a significant transformation after facing major headwinds in its search segment during 2024 [1] - Despite the transformation, certain revenue headwinds still persist as management navigates the challenges [1] Group 2 - The company is focused on identifying asymmetric investment opportunities within the technology, software, electronics, and energy transition sectors [1] - The analysis aims to achieve market-beating returns by studying small to mid-cap companies that are often less researched [1]

Core Insights - Perion Network reported a significant business reset and early results from its "Perion One" strategy, positioning itself as an AI-native execution infrastructure for digital advertising [5] Financial Performance - For Q4, GAAP net income was $8 million, or $0.19 per diluted share, while non-GAAP net income was $21.4 million, or $0.49 per diluted share [1] - Full-year 2025 revenue reached $439.9 million, with Contribution ex-TAC at $203.4 million and Adjusted EBITDA of $45.2 million, reflecting a 22% margin [6] - The company generated $41.9 million in cash from operations for 2025, a 504% year-over-year increase, and Adjusted free cash flow was $40.2 million, up 142% [7] Strategic Initiatives - CEO Tal Jacobson emphasized 2025 as a defining year for Perion, focusing on building Perion One as a centralized platform for marketers through technology integration and strategic partnerships [4] - The company launched new partnerships with Amazon, Walmart, and Mastercard to enhance its advertising capabilities [8][9] Revenue Mix and Growth Engines - Advertising Solutions revenue increased by 7% year-over-year in Q4, while web revenue declined by 17% year-over-year in Q4 and 13% for the full year [7] - CTV revenue grew by 59% in Q4 and 42% for the full year, reaching $62.1 million, while digital out-of-home revenue increased by 28% in Q4 and 36% for the full year, totaling $94.9 million [8] Future Guidance and Targets - For full-year 2026, Perion guided to Contribution ex-TAC of $215 million to $235 million and Adjusted EBITDA of $50 million to $54 million, factoring in a gradual decline in search and legacy activities [12] - Management set ambitious targets for 2028, including a performance spend CAGR of at least 25%, Contribution ex-TAC CAGR of at least 20%, and Adjusted EBITDA margins reaching 28% of Contribution ex-TAC [14]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 grew 6% year-over-year to $137.1 million, while Contribution ex-TAC increased 19% year-over-year to $65.2 million, significantly outpacing revenue growth [20] - Adjusted EBITDA reached $24.3 million, a 53% increase compared to last year, resulting in an Adjusted EBITDA margin of 37% of Contribution ex-TAC [20][25] - For the full year 2025, revenue was $439.9 million, with Contribution ex-TAC at $203.4 million and Adjusted EBITDA of $45.2 million, reflecting a 22% ex-TAC margin [21] Business Line Data and Key Metrics Changes - CTV revenue grew 59% in Q4 and 42% for the full year, reaching $62.1 million, driven by the shift from traditional TV to connected TV advertising [22] - Digital Out-of-Home revenue increased 28% in Q4 and 36% for the full year to $94.9 million, supported by an expanded global footprint [22] - Retail Media revenue rose 42% in Q4 and 36% for the full year, more than doubling the market growth [22] Market Data and Key Metrics Changes - Advertising Solutions revenue increased by 7% year-over-year in Q4, with CTV and Digital Out-of-Home accounting for 44% of revenue in Q4 and 36% for the full year 2025 [23] - Web revenue declined 17% year-over-year in Q4 and 13% for the full year, with a pro forma decline of 12% in Q4 and only 1% for the full year when excluding discontinued low-margin activities [23][24] Company Strategy and Development Direction - The company has redefined its mission and strategy, focusing on building Perion One as a centralized platform for marketers, integrating technologies and expanding strategic partnerships [3][4] - The introduction of Outmax, an AI-native execution agent, aims to optimize marketing activities across various channels, enhancing performance and efficiency [6][12] - By 2028, the company expects Perion One to represent the majority of its business, with a target of at least 25% CAGR for Perion One performance spend and 20% for Contribution ex-TAC [15][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong performance in key growth engines and a highly efficient operating model [19] - The company anticipates continued market share gains in rapidly expanding verticals, supported by the shift towards performance advertising [22][31] - Management highlighted the importance of strategic partnerships with companies like Amazon, Walmart, and Mastercard to enhance growth potential [13] Other Important Information - The company generated over 400% year-over-year increase in operating cash flow, ending the year with $313 million in net cash [17][20] - A share repurchase program was expanded to $200 million, reflecting confidence in the company's long-term value proposition [19][28] Q&A Session Summary Question: Can you walk us through the 2026 guidance assumptions? - Management indicated that the guidance reflects expectations of a gradual decline in search and legacy activities, with a sharper increase in Perion One contributions [36][40] Question: What are the implications of the Amazon DSP integration for 2026? - Management noted that the integration opens significant opportunities and is expected to enhance wallet share with advertisers [45][46] Question: What is the adoption rate of Outmax and any barriers to adoption? - Management reported strong adoption of Outmax, with performance driving increased budgets from advertisers [53] Question: Can you discuss market share gains in core growth areas? - Management confirmed that all growth engines outpaced the market, with CTV leading at nearly 60% year-over-year growth [77]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 grew 6% year-over-year to $137.1 million, while Contribution ex-TAC increased 19% year-over-year to $65.2 million, significantly outpacing revenue growth [20][21] - Adjusted EBITDA reached $24.3 million, a 53% increase compared to last year, resulting in an Adjusted EBITDA margin of 37% of Contribution ex-TAC [20][25] - For the full year 2025, revenue was $439.9 million, with Contribution ex-TAC at $203.4 million and Adjusted EBITDA of $45.2 million, reflecting a 22% ex-TAC margin [21][22] Business Line Data and Key Metrics Changes - CTV revenue grew 59% in Q4 and 42% for the full year, reaching $62.1 million, driven by the shift from traditional TV to connected TV advertising [22] - Digital out-of-home revenue increased 28% in Q4 and 36% for the full year to $94.9 million, supported by an expanded global footprint [22] - Retail media revenue rose 42% in Q4 and 36% for the full year, more than doubling market growth, indicating strong integration with retail partners [22] Market Data and Key Metrics Changes - Advertising solutions revenue increased by 7% year-over-year in Q4, with CTV and digital out-of-home accounting for 44% of revenue in Q4 and 36% for the full year 2025 [23] - Web revenue declined 17% year-over-year in Q4 and 13% for the full year, attributed to the shutdown of low-margin activities and a shift in user behavior [23][24] Company Strategy and Development Direction - The company has redefined its mission and strategy, focusing on the Perion One platform as a centralized solution for marketers, integrating technologies and expanding partnerships [3][4] - The introduction of Outmax, an AI-native execution agent, aims to optimize marketing activities across various channels, enhancing performance and efficiency [4][6] - By 2028, the company expects Perion One to represent the majority of its business, with a target of at least 25% CAGR for Perion One performance spend and 20% for Contribution ex-TAC [15][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong performance in key growth engines and a disciplined operating model [17][19] - The company anticipates continued market share gains in rapidly expanding verticals, supported by the shift towards performance advertising [22][31] - The outlook for 2026 includes a Contribution ex-TAC of $215 million-$235 million and Adjusted EBITDA of $50 million-$54 million, reflecting a strong foundation for future growth [29] Other Important Information - The company has expanded its share repurchase program to $200 million, reflecting confidence in its long-term value proposition and cash generation ability [19][28] - The balance sheet remains strong with $313 million in cash, providing financial flexibility for investments and potential M&A opportunities [27] Q&A Session Summary Question: Can you walk us through the 2026 guidance assumptions? - Management indicated that the guidance reflects expectations of a gradual decline in search and legacy activities, with a sharper increase in Perion One contributions [36][40] Question: What are the implications of the Amazon DSP integration for 2026? - The integration is expected to open significant opportunities, with strong customer demand for dynamic content optimization through Amazon [45][46] Question: What barriers exist for marketers adopting Outmax? - Adoption has been strong, with performance driving increased budgets, indicating a positive reception among advertisers [53] Question: Can you discuss the fundamentals behind the web revenue decline? - The decline is attributed to the shutdown of low-margin activities and a shift in user behavior towards other platforms [68] Question: What underpins confidence in achieving the 28% EBITDA margin by 2028? - Confidence stems from efficiency measures already implemented and ongoing investments in automation and AI tools [60]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 grew 6% year-over-year to $137.1 million, while Contribution ex-TAC increased 19% year-over-year to $65.2 million, significantly outpacing revenue growth [20][21] - Adjusted EBITDA reached $24.3 million, a 53% increase compared to last year, resulting in an Adjusted EBITDA margin of 37% of Contribution ex-TAC [20][26] - Operating cash flow increased over 400% year-over-year, reaching $21.8 million in Q4, with a net cash position of $313 million at year-end [20][28] Business Line Data and Key Metrics Changes - CTV revenue grew 59% in Q4 and 42% for the full year, reaching $62.1 million, driven by the shift from traditional TV to connected TV advertising [23] - Digital out-of-home revenue increased 28% in Q4 and 36% for the full year to $94.9 million, supported by an expanded global footprint [23] - Retail media revenue rose 42% in Q4 and 36% for the full year, more than doubling market growth, indicating strong integration with retail partners [23] Market Data and Key Metrics Changes - Advertising solutions revenue increased by 7% year-over-year in Q4, with CTV and digital out-of-home accounting for 44% of revenue in Q4, up from 34% the previous year [24] - Web revenue declined 17% year-over-year in Q4, attributed to the shutdown of low-margin legacy activities and a shift in user behavior towards other platforms [24][70] Company Strategy and Development Direction - The company has redefined its mission and strategy, focusing on the Perion One platform as a centralized solution for marketers, integrating AI capabilities to enhance performance [3][4] - Strategic partnerships with Amazon, Walmart, and Mastercard have been established to enhance programmatic revenue potential and improve campaign personalization [13][14] - The company aims for Perion One to represent the majority of its business by 2028, with a focus on organic growth and performance-driven advertising [15][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong performance in key growth engines and a disciplined operating model [19][30] - The company anticipates continued market share gains in rapidly expanding verticals, supported by the performance of its AI-driven solutions [32][78] - The outlook for 2026 includes a Contribution ex-TAC of $215 million to $235 million and an Adjusted EBITDA of $50 million to $54 million, reflecting a strong foundation for future growth [30] Other Important Information - The company has expanded its share repurchase program to $200 million, reflecting confidence in its long-term value proposition and cash generation ability [29] - The transition to an AI-native execution infrastructure is expected to drive significant operational efficiencies and margin expansion over the coming years [33][34] Q&A Session Summary Question: Can you walk us through the 2026 guidance and the assumptions behind it? - Management indicated that the guidance reflects expectations of a gradual decline in search and legacy activities, with a sharper increase in Perion One contributions due to market dynamics [37][41] Question: What are the implications of the Amazon DSP integration for 2026? - Management noted that the integration with Amazon DSP opens significant opportunities, and they expect to see wallet share gains from both brand and agency advertisers [45][46] Question: What underpins the confidence in achieving the 28% EBITDA margin by 2028? - Management highlighted the progress made in efficiency measures and the expected impact of ongoing investments in automation and AI tools [59][60] Question: What is driving the decline in web revenue? - The decline is attributed to the proactive shutdown of low-margin activities and a shift in user behavior towards other platforms, with a pro forma decline of 12% in Q4 [66][70] Question: How is the customer interaction changing with the new strategy? - Management stated that while the customer base remains similar, the approach has shifted to a more holistic view, focusing on overall performance rather than specific products or channels [71][72]

Core Insights - Perion Network reported quarterly earnings of $0.49 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.33 per share a year ago, resulting in an earnings surprise of +1.03% [1] - The company achieved revenues of $137.14 million for the quarter ended December 2025, exceeding the Zacks Consensus Estimate by 0.32% and up from $129.58 million year-over-year [2] Financial Performance - Over the last four quarters, Perion Network has consistently surpassed consensus EPS estimates [2] - The company has also topped consensus revenue estimates four times in the same period [2] - The current consensus EPS estimate for the upcoming quarter is $0.15 on revenues of $95.6 million, and for the current fiscal year, it is $1.27 on revenues of $468.77 million [7] Market Position - Perion Network shares have declined approximately 10.5% since the beginning of the year, contrasting with the S&P 500's flat performance [3] - The Zacks Industry Rank places the Internet - Content sector in the top 37% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] Future Outlook - The company's earnings outlook will be crucial for determining stock price movements, particularly in light of management's commentary during the earnings call [3][4] - The trend of estimate revisions prior to the earnings release was unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, suggesting expected underperformance in the near future [6]

Investor Presentation Forward Looking Statements This presentation contains historical information and forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the safe- harbor provisions of the Private Securities Litigation Reform Act of 1995 with respect to the business, financial condition and results of operations of Perion. The words "will," "believe," "expect," "intend," "plan," "should," "estimate" and similar expres ...

Summary of Perion Network FY Conference Call Company Overview - **Company**: Perion Network (NasdaqGS:PERI) - **Industry**: Digital Advertising Technology - **CEO**: Tal assumed the role in 2023, previously led CodeFuel search advertising business, focusing on market share and revenue growth [3][5] Core Business and Strategy - **Market Position**: Perion aims to address inefficiencies in digital advertising, where $1 trillion is spent annually, by creating a centralized platform for advertisers [5][6] - **Perion One**: A new product that integrates various advertising channels into a single platform, optimizing budget allocation across different channels [7][20] - **Performance Focus**: Shifted all products to be performance-driven, enhancing advertiser retention by ensuring measurable results [25][31] - **Outmax**: An AI-driven algorithm that optimizes ad campaigns in real-time, reportedly improving yield by up to 40% on the same budget [11][35] Financial Performance and Growth - **CTV Growth**: Achieved 75% growth in CTV in Q3, compared to a 14% market growth, indicating strong performance in this segment [35][36] - **Revenue Model**: Maintains a take rate based on ad spending, similar to models used by Google and Meta, with potential for volume discounts as budgets increase [82][86] - **Buyback Program**: Announced a $200 million buyback program, reflecting confidence in the company's valuation and cash generation capabilities [97][98] Product Development and Market Trends - **Dynamic Creative Optimization (DCO)**: Utilizes DCO to enhance ad performance, particularly in out-of-home advertising, by tailoring messages based on real-time data [80][81] - **Retail Media**: Recognizes the growing importance of out-of-home advertising as a performance channel, linking it to retail media strategies [80][81] - **Self-Service Initiatives**: Plans to introduce more self-service options for small and medium businesses, leveraging GenAI for ease of use [32][93] Challenges and Future Outlook - **Market Positioning**: Acknowledges the need to pivot away from traditional Open Web advertising due to changing consumer behavior and competition from walled gardens [122][123] - **Long-Term Goals**: Aims for significant growth in 2027, focusing on scaling operations and enhancing product offerings [100][101] - **Customer Acquisition**: Currently relies on major agencies for customer acquisition but plans to simplify the process for smaller businesses in the future [91][94] Key Takeaways - Perion Network is transforming its business model to focus on performance-driven advertising solutions, leveraging AI technology to optimize ad spend and improve results for advertisers [5][11][25] - The company is experiencing significant growth in CTV and is actively working to integrate out-of-home advertising into its performance metrics [35][80] - Future strategies include expanding self-service capabilities and enhancing the overall user experience for advertisers, particularly in the SMB segment [32][93]