Perion(US:PERI)2024-05-08 15:54Financial Data and Key Metrics Changes - Revenue increased by 9% year-over-year to $157.8 million despite a 52% decrease in video revenue [38][39] - Adjusted EBITDA decreased by 35% year-over-year to $20.3 million, resulting in a 13% adjusted EBITDA margin [43][44] - GAAP net income decreased by 51% to $11.8 million, with cash flow from operations decreasing by 61% to $6.9 million [38][45] - Net cash slightly increased to $479.7 million from $472.7 million at the end of the previous quarter [46] Business Line Data and Key Metrics Changes - Search advertising revenue grew by 26% year-over-year to $82 million, with average daily searches increasing by 20% [41][42] - Revenue from advertising solutions decreased by 5% year-over-year to $75.8 million, accounting for 48% of total revenue [39][41] - CTV advertising surged by 108% year-over-year to $8.2 million, representing 11% of advertising solutions revenue [40] - Retail media solutions grew by 134% year-over-year to $14.9 million, accounting for 20% of advertising solutions revenue [41][14] Market Data and Key Metrics Changes - Digital out-of-home advertising grew by 25% year-over-year on a pro forma basis to $9.7 million [41] - The number of publishers grew by 8% year-over-year, although there was a decline towards the end of the quarter [42][70] Company Strategy and Development Direction - The company is focusing on an advertiser-centric universe with technologies that enhance brand presence across various consumer journeys [10][11] - The strategy includes leveraging AI technology to optimize advertising and enhance consumer engagement [11][30] - The company aims to expand its technology and solutions through acquisitions and in-house R&D [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges due to changes in Microsoft Bing's advertising pricing, which are expected to impact revenue in the upcoming quarters [6][35] - Despite current challenges, management remains confident in the company's resilience and ability to adapt [36][37] - The company expects a return to normal growth in video revenue by the third quarter of 2024 [50] Other Important Information - The company has received two tax certifications for 2024, reflecting its commitment to integrity and quality in digital advertising [33] - The launch of SORT 2.0 and Wave technologies aims to enhance targeting and engagement in advertising [28][30] Q&A Session Summary Question: Video revenue decline expectations - Management expects video revenue to stabilize and return to normal growth by Q3 2024 after another quarter of negative comparison [50] Question: Buyback authorization activity - The buyback plan is set to start at the end of May 2024, with expectations for immediate execution [53][54] Question: SORT 2.0 launch and metrics - SORT 2.0 is being launched now, and metrics will be shared once available [56] Question: HiveStack growth expectations - HiveStack's 25% year-over-year growth aligns with expectations, with no dramatic changes anticipated for the full year [56] Question: Cookie deprecation impact - Management believes the delay in cookie deprecation provides a cushion for the non-search business, as they are prepared for the cookie-less era [57][60] Question: Vertical demand context - Strong demand is observed in retail, consumer goods, travel, healthcare, and automotive sectors [65][66]