Perion Network Ltd

Hello, everybody, and welcome to the Perion Network fourth quarter and full year 2023 earnings conference call. Today's conference is being recorded. The press release detailing the financial results is available on the company's website at www.perion.com. Before we begin, I'd like to read the following Safe Harbor statement. Today's discussion includes forward-looking statements. These statements reflect the company's current views with respect to future events. These forward-looking statements involve known and unknown risks, uncertainties, and other factors, including those discussed under the heading Risk Factors and Elsewhere in the company's annual report on Form 20F that may cause actual results, performance, or achievements to be materially different than any future results, performance, or achievements anticipated or implied by these forward-looking statements. The company does not undertake to update any forward-looking statements to reflect future events or circumstances. As in prior quarters, The results reported today will be analyzed both on a GAAP and a non-GAAP basis. While mentioning EBITDA, we'll be referring to adjusted EBITDA. We have provided a detailed reconciliation of non-GAAP measures to their comparable GAAP measures in our earnings release, which is available on our website and has also been filed on Form 6K. Hosting the call today are Tal Jacobson, Perrion's Chief Executive Officer, and Mio Sagron, Perrion's Chief Financial Officer. I will now turn the call over to Tal Jacobson. Please go ahead.

Welcome to Perrion's Q4 and full year 2023 earnings. I'm excited to unveil our performance for the quarter, reflect on a year of substantial achievements, and provide a glimpse into the future. Before we look at the numbers, let's take a minute to align on our mission. Perion unlocks advertising possibilities across all screens, platforms and locations. We are powering our magic by advanced technology. Perion is an ever-growing ecosystem. cross-channel, AI-driven, locally optimized, and most importantly, we exist naturally along the consumer's journey. Today's consumers lead a dynamic and diverse lifestyle, having multiple interactions with the technologies around them. Each journey is different, constructed by a multiverse of multiple touchpoints. We make sure our clients have the solutions for each of those touchpoints. We enable advertisers to interact with their consumers naturally, regardless of the platform they use, to achieve maximum impact. Pellion's technologies and solutions live naturally across the consumer's journey. Picture this, a typical day in Daniel's life. The day begins when she sips her coffee while scrolling through her favorite social app. Our dynamic video ad appears feeding naturally into our experience, a subtle yet effective touchpoint. As she commutes to work, our AI-driven digital audio ads wave Taylor's messages to her preferences. This makes her interaction unique and personal. As she looks at the road, she sees our extra large video ad on the side of the road. Those moments are not coincidences. They are carefully crafted touch points in our journey with the consumer. As the day goes by, Daniel remembers the messaging we've presented to her across the channels. She decides to look for that product on her search engine. This is where our search technology and the partnership with Microsoft comes into play. When Danielle decides to take a coffee break and read some news online, she sees our well optimized dynamic video display and high impact ads on our favorite websites. Of course, we will meet Danielle again on her way to her favorite store through our digital out of home ads and continue to interact with her even within the store. As the day winds down, our technology doesn't. Our CTV dynamic ad solutions continue to present personalized content. Our technology is an immersive cross-channel ecosystem that accompanies consumers throughout their daily journey. I'm pleased to report continued profitability for Q4. Once again, diversification proved to be the right strategy. In the fourth quarter, we see a notable growth in search, CTV, and retail media. Additionally, our strategic acquisition of HiveStack in December expanded our geographical and channel reach. Looking ahead at 2024, a key aspect of our strategy is to enhance our touchpoints across the consumer journey using cutting-edge technology. Hence, we're increasing our investment in technology through our in-house R&D teams, including the newly joined Hivestack team. We're also actively seeking inorganic opportunities that align with our vision. With a strong cash flow from operation of over $150 million a year and a total cash of over $470 million, Perrion is well positioned to execute additional acquisitions. In Q4 2023, we achieved a robust top and bottom line growth. Our revenue and adjusted EBITDA reflect on our financial strength and our operational efficiency and market competitiveness. Turning to our full year performance, the same key indicators underpin our excellence. We've maintained constant focus on revenue growth, profitability, and operational optimization, yielding outstanding results throughout 2023. Central to our success is our cutting-edge technology that enables agility throughout the consumer's journey. Now let's see where some of our technologies met consumers in Q4. The Perion CTV solution are gaining momentum with advertisers. According to eMarketer, CTV ad spending is on the rise. Impressively, Perion's results stand way above their growth projections, demonstrating our ability to execute and conquer any channel and vertical we aim for. One of our innovations in the CTV space is pause ads. In partnership with DIRECTV, we've created yet another opportunity for a branded moment on TV. It is also one of the few ways to guarantee that commercial message is noticed in both linear and CTV. When viewers pause content, the CTV ads come into play, offering segmented audience targeting and increasing consumer engagement. Those ads are both noticeable and actionable. This ad by Shipt is the great example. We build those ads in short repeating loops so that viewers are virtually guaranteed to see them. Our pause ads run across nearly every TV network on DirecTV inventory, both linear and streaming. This includes TV networks without any ads in linear, such as HBO and sports networks like ESPN. Brands that already use our PaaS TV ads include Paco Rabanne, Con Edison, Shipt, Twilo, Eversource, AAA, and more. The Payone retail media solution continues to grow and outpace both our internal expectation and industry benchmark. This is a testament to our effective strategy and execution in this rapidly growing space. As part of our retail media solutions, last quarter we launched our generative AI audio advertising technology, WAVE. And the campaign with Albertsons was the first one we revealed. Now, I'm happy to share that Wave is adopted by additional leading brands, running on leading platforms such as Spotify, iHeartMedia, Audioboom, and many more. This time, we're sharing the Pep Boys campaign. To our non-US audience, Pep Boys is a leading US automotive service provider, operating in more than 900 locations across the US. Let's listen to this generative AI ad.

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