Perion(US:PERI)2022-08-03 17:00Financial Data and Key Metrics Changes - The company reported a revenue of $146.7 million for Q2 2022, reflecting a 34% year-over-year growth, the highest second quarter revenue since 2014 [32][34] - Adjusted EBITDA reached $28.5 million, representing a 99% year-over-year growth and a margin of 19% compared to 13% last year [33][38] - GAAP net income was $19.5 million, marking a 175% year-over-year increase, the highest GAAP net income ever [33][38] - Non-GAAP diluted earnings per share were $0.51, a 55% year-over-year growth [33] - The media margin improved to 47% of revenue excluding TAC, up from 33% in the previous year [39] Business Line Data and Key Metrics Changes - Display advertising revenue was $81.6 million, a 41% year-over-year increase, with video revenue growing by 273% year-over-year, representing 44% of display advertising revenue [34][35] - Search advertising revenue was $65.1 million, a 26% year-over-year growth, driven by a 42% increase in average RPM [35][27] - The number of video platform publishers increased by 145% year-over-year from 22 to 54 [34] Market Data and Key Metrics Changes - The revenue mix for Q2 2022 was 56% display advertising and 44% search advertising, compared to 53% and 47% respectively in 2021 [36] - The company reported that 80% of its revenue comes from the U.S., indicating stronger performance in this market [55][56] Company Strategy and Development Direction - The company emphasizes diversification across digital advertising channels, including search, social, and display advertising [8][11] - The introduction of the AI hub (iHub) is aimed at improving operational efficiencies and optimizing media costs [14][80] - The company is focusing on privacy-first solutions, particularly with its SORT platform, to address consumer privacy concerns [15][71] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continuing momentum despite macroeconomic challenges, citing strong execution and market share gains [31][43] - The company anticipates that the shift towards direct response advertising will continue, supported by increased advertiser spending in search [27][92] - Management highlighted the importance of adapting to changing advertiser preferences and the ongoing investment in innovation [62][86] Other Important Information - The company reported net cash provided by operating activities of $25.7 million, a 76% year-over-year growth [40] - As of June 30, 2022, the company had cash and cash equivalents of $353 million with zero debt [43] Q&A Session Summary Question: What is driving the strong search revenue growth? - The increase in the number of new publishers and higher RPM due to targeted advertising strategies are key drivers [49] Question: How does the company view geographic strength and brand versus direct response advertising? - The U.S. market is stronger, with display advertising growing more than search advertising [51][55] Question: What parts of ad tech are being affected by macroeconomic conditions? - Companies with narrow offerings are more affected, while the company's diversification strategy mitigates risks [61] Question: What is the expectation for the revenue mix between advertising and search for the year? - The company expects a higher percentage of advertising in Q3 and Q4, but acknowledges the volatility in advertiser preferences [76] Question: How is the company thinking about acquisitions moving forward? - The company is focused on organic growth but is also looking for opportunities in CTV and retail sectors for potential acquisitions [91][109]