Summary of Perion Network Conference Call Company Overview - **Company**: Perion Network (NasdaqGS:PERI) - **Industry**: Advertising Technology and Digital Media - **Core Offering**: Perion One Platform, an AI-driven solution to streamline digital advertising across multiple channels [3][6] Key Insights Industry Dynamics - The digital advertising market is valued at approximately **$1 trillion**, with continuous growth expected [5] - A significant shift is occurring where advertisers are prioritizing **ROI-driven channels** over brand awareness, leading to increased demand for performance-based advertising solutions [7][10] Company Strategy - Perion is focusing on **performance-driven advertising**, with recent launches like Performance CTV and Outmax aimed at enhancing ROI for clients [7][10] - The company is consolidating its offerings under the Perion One platform to reduce inefficiencies caused by multiple vendors and platforms [9][10] Product Development - The introduction of **SODA**, an AI algorithm for traffic shaping, aims to optimize supply paths by connecting advertisers with high-quality inventory, thus reducing costs and increasing yields [12][13] - AI plays a crucial role in Perion's product development, with features like Dynamic Creative Optimization (DCO) and high-frequency trading algorithms enhancing campaign performance [15][16] Market Positioning - Perion is well-positioned in the **CTV** and **digital out-of-home** advertising spaces, reporting a **75% year-over-year growth** in CTV [20][22] - The company has launched a **digital out-of-home player**, establishing itself as a full-stack operator in this emerging market [26][31] Financial Performance - In Q3, Perion reported a **63% growth in EBITDA**, driven by operational efficiencies and a shift towards platform-based revenue [34] - The company plans to increase its share buyback program to **$200 million**, indicating confidence in its financial health and future growth [36] Future Outlook - The focus for 2026 will be on scaling growth and improving efficiency through technology rather than increasing headcount [40] - Key performance indicators (KPIs) to watch include growth in **ex-TAC** (revenue excluding traffic acquisition costs) and overall operational efficiency [40] Additional Considerations - The tension between CMOs and CFOs is pushing the industry towards a greater emphasis on measurable outcomes, impacting how advertising strategies are developed [39] - Perion's unique position as a technology provider in the digital out-of-home space allows it to capitalize on the growing demand for programmatic advertising solutions [25][31]

Q1 2025 Financial Performance - Revenue reached $89.3 million[48] - Adjusted EBITDA was $1.8 million, representing a 2% margin[48] - Non-GAAP net income amounted to $5.4 million, with a 5% ex-TAC margin[48] - Diluted non-GAAP EPS stood at $0.11[48] - Net cash reached $358.5 million[48] Revenue Breakdown by Channel - DOOH revenue increased by 80% year-over-year to $17.4 million, accounting for 19% of total revenue[53] - CTV revenue increased by 31% year-over-year to $10.7 million, accounting for 12% of total revenue[53] - Web revenue decreased by 28% year-over-year to $41.3 million, accounting for 46% of total revenue[53] - Search revenue decreased significantly by 76% year-over-year to $19.6 million, accounting for 22% of total revenue[53] Growth Engines - Digital Out-of-Home (DOOH) experienced 80% year-over-year revenue growth[23] - CTV saw a 31% year-over-year revenue growth[23] - Retail Media achieved a 33% year-over-year revenue growth[23] Greenbids Acquisition - The company acquired Greenbids for a total consideration of $50 million, including $27.5 million in cash upon closing and a $22.5 million two-year cash earnout[82] - An additional $15 million was allocated for a three-year employee retention plan involving cash and equity[82] 2025 Financial Outlook - The company raised its full-year 2025 revenue guidance from $400-$420 million to $430-$450 million[85] - Adjusted EBITDA guidance was also raised from $40-$42 million to $44-$46 million, maintaining an Adjusted EBITDA/Revenue margin of 10% and an Adjusted EBITDA/Contribution ex-TAC margin of 22%[85]