Perion(US:PERI)2023-08-02 17:16Financial Data and Key Metrics Changes - Revenue for Q2 2023 grew by 22% year-over-year to $178.5 million, reflecting strong continued growth [20][59] - Adjusted EBITDA for the quarter increased by 45% year-over-year to $41.2 million, with an adjusted EBITDA margin rising from 19% to 23% [41][20] - GAAP net income increased by 10% year-over-year to $21.4 million, with non-GAAP diluted EPS growing by 65% year-over-year to $0.84 per diluted share [20][22] - Cash and cash equivalents increased from $436 million at the end of Q1 to $483 million at the end of Q2 2023 [23] Business Line Data and Key Metrics Changes - Search Advertising revenue grew by 21% year-over-year to $79.1 million, accounting for 44% of total revenue, with average daily searches increasing by 68% year-over-year to 28.6 million [9][20] - Retail Media business accelerated, growing 63% year-over-year and accounting for 10% of Display Advertising revenue [21] - Video revenue increased by 14% year-over-year, representing 41% of Display Advertising revenue [21] - CTV revenue more than doubled compared to Q2 2022, representing 7% of Display Advertising revenue [21] Market Data and Key Metrics Changes - The company continues to outperform the digital advertising industry, capturing shifts in advertising budgets while maintaining high margins [8][17] - The contribution excluding TAC for the quarter grew by 27% year-over-year to $77 million, representing 43% of revenue [20][60] Company Strategy and Development Direction - The company aims to maintain agility and capture market share in core activities while exploring new markets [16][35] - A focus on technology and AI is emphasized, with investments in both supply and demand sides of digital advertising [34][35] - The strategic diversification business model is highlighted as a key driver for growth and flexibility in response to market changes [35][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow despite economic headwinds, raising the 2023 annual guidance for revenue and adjusted EBITDA [23][58] - The company is committed to innovation and efficiency measures to enhance profitability and margin expansion [39][56] Other Important Information - The company has a strong cash position and effective cash management, generating $5.2 million in financial income in Q2 [61] - The company is exploring M&A opportunities to accelerate growth, particularly in CTV and Retail Media [51][93] Q&A Session Summary Question: What are the goals for Search over the next two to three years? - The company aims to grow the number of publishers and searches while continuously seeking strategic partnerships [43][44] Question: What is the incremental value of Retail Media compared to other solutions? - Retail Media is seen as a data-driven solution that is stickier and expected to continue growing [75] Question: How does international market growth compare to North America? - The majority of business remains in the U.S., but there is significant activity in Europe due to new agreements [85] Question: What is the outlook for cash and potential acquisitions? - The company is looking for M&A opportunities to sustain growth, but share buybacks could be considered if suitable targets are not found [50][51] Question: How does the company view the impact of Generative AI? - Generative AI is recognized as a future driver for the internet and advertising, but it is still early to assess its full impact [100]