Perion raises guidance on strong revenue growth

Second quarter net profit fell to $1.8 million despite 53% revenue growth to $12.3 million.

Perion Networks Inc. (Nasdaq:PERI: TASE:PERI) has raised its full-year guidance following strong revenue growth for the second quarter of 2012.

Revenue rose 53% to $12.3 million for the second quarter from $8 million for the corresponding quarter of 2011. The company attributed the growth to continued shifting of its IncrediMail premium product from a service offering to a product offering, as well as the consolidation of Smilebox revenue and higher advertising revenue from IncrediMail. Product revenue quadrupled to $5.1 million for the second quarter from $1.2 million for the corresponding quarter and search revenue rose to $6.4 million from $6.2 million.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 13% to $2.7 million for the second quarter from $2.2 million, despite higher customer acquisition costs. Net profit fell to $1.8 million ($0.18 per share) from $1.9 million.

Cash flow from operations fell to $2.5 million in the first half from $4.1 million in the first half of last year, due to the higher customer acquisition costs and search revenues receivables.

Perion raised its guidance to a net profit of $7.5-8.5 million and EBITDA of $10.5-11.5 million on $50-52 million revenue.

Perion CEO Josef Mandelbaum said. “Based on strong second quarter results and ongoing operational improvements, we are increasing our outlook for the full year. We currently expect a better than 50% increase in revenues in the second half of this year compared to the second-half of last year." He pointed to 15% growth in the company search business over the first quarter, and said that the trajectory was rising as the company reaps the benefits of its investments in infrastructure and systems over the past year

Mandelbaum added, “In addition, as we approach the one year anniversary of our Smilebox acquisition, I am pleased to report that it continues to be profitable with 30% top-line growth. We are on track to launch our revolutionary iPad email app at the end of the third quarter as well as major improvements to our Smilebox iPhone app during the quarter."

Perion's share price rose 1.7% in premarket trading on Nasdaq to $5.20, giving a market cap of $51 million, and rose 4% by late afternoon on the TASE to NIS 20.90.

Published by Globes [online], Israel business news - - on August 8, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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