Perion(US:PERI)2023-11-01 15:01Financial Data and Key Metrics Changes - Revenue for Q3 2023 increased by 17% year-over-year to $185.3 million, with a two-year CAGR of 24% [32][41] - Adjusted EBITDA increased by 29% year-over-year to $42.7 million, with an adjusted EBITDA margin of 23%, up from 21% in Q3 2022 [34][32] - GAAP net income rose by 28% to $32.8 million, or $0.65 per diluted share, compared to $25.6 million, or $0.53 per diluted share in Q3 2022 [30][32] - Non-GAAP net income increased by 42% to $42.4 million, or $0.84 per diluted share, compared to $29.9 million, or $0.61 per diluted share last year [30][32] Business Line Data and Key Metrics Changes - Display advertising revenue increased by 14% year-over-year to $99.2 million, accounting for 54% of total revenue [28] - Retail media revenue more than doubled, increasing by 112% year-over-year, and accounted for 30% of display advertising revenue compared to 7% in the same period last year [33] - CTV revenue grew by 39% year-over-year, representing 8% of advertising revenue compared to 7% last year [42] Market Data and Key Metrics Changes - The U.S. digital audio ad market is projected to reach nearly $6.8 billion in 2023, with the company's new WAVE solution designed to enhance personalization and engagement [12] - Average daily searches increased by 86% year-over-year, and the number of publishers grew by 60% year-over-year [42] Company Strategy and Development Direction - The company focuses on technological innovation and operational efficiency to drive growth and profitability [6][34] - There is an emphasis on diversifying cash allocation to mitigate risks associated with geopolitical tensions, as nearly 100% of revenue is generated outside of Israel [26] - The company is actively reviewing M&A opportunities to accelerate growth and diversification, particularly in technology that complements its existing portfolio [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver continuous profitable growth despite macroeconomic headwinds [19][27] - The company reiterated its full-year 2023 guidance, indicating strong expectations for year-over-year revenue and adjusted EBITDA growth [36] - Management highlighted the resilience of the business model and the ability to adapt to changing market conditions [19][27] Other Important Information - The company has successfully directed resources to high-growth areas with higher margins, contributing to a 29% year-over-year growth in adjusted EBITDA [34] - The operational discipline and innovative technology have positioned the company as a unique and competitive player in the industry [31] Q&A Session Summary Question: What is driving the growth in retail media? - The growth is attributed to both new customers and deepening relationships with existing customers through enhanced technologies like WAVE [46] Question: Why is video advertising down while CTV is up? - The decrease in video revenue is due to a strategic shift in inventory from video to display to maximize profitability [42][47] Question: What is the outlook for growth in search and display? - The company expects organic growth to continue in search, retail, and CTV, with ongoing evaluations for potential M&A opportunities [64] Question: How is SORT performing? - SORT is performing well and is seen as a key driver for growth, especially as it does not rely on cookies or IPs, making it resilient to changes in privacy regulations [76]