Preliminary Q3 results boost Perion Network

Doron Gerstel  credit: Perion
Doron Gerstel credit: Perion

The company expects to report third quarter revenue of $158 million, 31% more than in the corresponding quarter of 2021.

The share price of Perion Network (TASE: PERI; Nasdaq: PERI) rose by over 7% on the Tel Aviv Stock Exchange today after the release of preliminary third quarter results this morning that bettered market expectations. The stock opened on a decline, but the trend changed after the preliminary results were published.

Perion Network, which deals in digital advertising and Internet search, expects to report third quarter revenue of $158 million, representing 31% growth over the corresponding quarter of 2021. According to the figures released this morning, adjusted EBITDA will grow 76% to $31 million, and to 46% of sales excluding traffic acquisition costs, up from 37% in the corresponding quarter. The better than expected results actually come against a background of weakness in the digital advertising market and in the results of other companies in this field.

Perion Network’s guidance published in the past for 2022 as a whole is for a rise in revenue to $620-640 million, and adjusted EBITDA of over $102 million, representing 47% growth in comparison with 2021 and 41% of sales excluding traffic acquisition costs. The preliminary results for the third quarter indicate that the company’s revenue in the first three quarters totaled $430 million and EBITDA was $82.1 million, so that to meet its guidance it will have to present revenue of about $200 million and EBITDA of just $20 million in the final quarter.

The fourth quarter is usually a strong one for Perion Network, with such events as Christmas and "Black Friday" falling in the quarter, and given that this year there will also be other advertising-intensive events such as the mid-term elections in the US, it would appear that the company will not find it difficult to meet its revenue guidance, and even to exceed its EBITDA guidance.

"The real test of a strategy is what happens when the going gets tough. Perion’s diversification strategy has demonstrated the level of predictability and ongoing sustainability of our business, driving strong revenue and EBITDA growth," Perion Network CEO Doron Gerstel said, commenting on the preliminary results.

"Our innovative technology allows us to gain market share, as advertisers and publishers are looking for higher ROI at these trying times. Our SORT technology - which is built on multi-award-winning AI that leverages the powerful consumer privacy trend, is gaining huge momentum and attracting world-class advertisers like Mercedes," Gerstel added.

Perion Network, which has a market cap of $884 million after a 15% decline in its share price in 2022 to date, is due to publish its full third quarter financials on November 9.

Published by Globes, Israel business news - en.globes.co.il - on October 6, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

Doron Gerstel  credit: Perion
Doron Gerstel credit: Perion
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