Perion(PERI) - 2023 Q4 - Annual Report

Financial Performance - Net cash provided by operating activities in Q3 2023 was $40.1 million, a 15.6$34.7 million in Q3 2022[1] - Cash and cash equivalents, short-term bank deposits, and marketable securities totaled $523.6 million as of September 30, 2023, up 21.9$429.6 million as of December 31, 2022[1] - Total revenue for Q3 2023 was $185.3 million, a 16.8$158.6 million in Q3 2022[12] - Net income for Q3 2023 was $32.8 million, a 28.3$25.6 million in Q3 2022[12] - Diluted earnings per share for Q3 2023 were $0.65, up 22.6$0.53 in Q3 2022[12] - Total assets as of September 30, 2023, were $940.1 million, an 8.0$870.2 million as of December 31, 2022[14] - Retained earnings as of September 30, 2023, were $148.8 million, a 110.2$70.8 million as of December 31, 2022[14] - Revenue increased by 17% year-over-year to $185.3 million in Q3 2023, with a total of$509.0 million for the first nine months of 2023[21][30] - Adjusted EBITDA grew by 29% year-over-year to $42.7 million in Q3 2023, reaching$115.2 million for the first nine months of 2023[21][30] - Non-GAAP Net Income increased by 42% year-over-year to $42.4 million in Q3 2023, reaching$114.4 million for the first nine months of 2023[30] - Net cash from operations increased by 16% year-over-year to $40.1 million in Q3 2023, totaling$105.2 million for the first nine months of 2023[30] - Revenue increased 17% to $185.3 million in Q3 2023 from$158.6 million in Q3 2022[35] - GAAP net income increased by 28% to $32.8 million in Q3 2023 compared to$25.6 million in Q3 2022[36] - Non-GAAP net income was $42.4 million, or 23$29.9 million, or 19% of revenue, in Q3 2022[37] - Adjusted EBITDA was $42.7 million, or 23$33.0 million, or 21% of revenue (and 51% of Contribution ex-TAC) in Q3 2022[38] Advertising Revenue - Display advertising revenue in Q3 2023 was $99.2 million, up 14.3$86.8 million in Q3 2022[12] - Search advertising revenue in Q3 2023 was $86.1 million, a 19.9$71.8 million in Q3 2022[12] - Retail Media revenue surged 112% year-over-year to $13.0 million in Q3 2023, accounting for 13$7.9 million in Q3 2023, representing 8% of Display Advertising revenue[29] - Search Advertising revenue rose by 20% year-over-year to $86.1 million in Q3 2023, with a total of$230.5 million for the first nine months of 2023[30] - Display Advertising revenue increased 14% YoY, accounting for 54% of total revenue, driven by a 112% YoY increase in Retail revenue to $13.0 million and a 39$7.9 million[35] - Search Advertising revenue increased 20% YoY, accounting for 46% of revenue, with an 86% increase in Average Daily Searches and a 16% increase in the number of publishers[35] Costs and Expenses - Traffic acquisition costs and media buy in Q3 2023 were $108.0 million, a 15.3$93.6 million in Q3 2022[12] - TAC amounted to $108.0 million, or 58$93.6 million, or 59% of revenue, in Q3 2022[36] Guidance and Forecast - Perion reiterates its annual revenue and adjusted EBITDA guidance for 2023[31] - 2023 revenue guidance is $730-$750 million, representing a 16% YoY growth[32] - 2023 Adjusted EBITDA guidance is $167+ million, representing a 26% YoY growth[32] - Adjusted EBITDA to Revenue is expected to increase to 23% in 2023 from 21% in 2022[32] Operational Metrics - Average Daily Searches increased by 86% year-over-year to 31.3 million, with Search Advertising publishers growing by 16% to 164[29] Innovation and Product Development - The company launched WAVE, a generative AI-powered dynamic audio advertising solution, targeting Retail, QSR, automotive, and travel verticals[23][26]