Perion Network Ltd

2025 earnings conference call. Today's conference is being recorded and an archive of the webcast will be posted on the company website. 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 harbour 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 and 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 analysed both on a gap and a non-gap basis. While mentioning EBITDA, we will 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 Elad Toubri's Perrion Chief Financial Officer. I would now like to turn the call over to Tal Jacobson. Please go ahead.

Good morning, and thank you for joining us on the Payone's Earning Call for the second quarter of 2025. We continue to focus on our vision, a future where CMOs and their teams are powered by a centralized platform built for their needs. Contrary to CROs who rely on Salesforce, CROs on Monday.com, and CTOs on Jira, CMOs who drive nearly $1 trillion annually through the pipes of digital advertising lack a centralized platform that supports their needs. As of now, a comprehensive centralized platform tailored for marketer needs has not emerged. This creates a clear gap in the market. Perion One is a platform that connects media with measurable business outcomes, a channel-neutral platform that brings together creative, data, and AI. That's the role we want Perion One to play and the direction we're steadily moving towards. With every feature we develop, every channel we expand into, and every new advertiser we onboard, we're taking a clear step towards becoming the CMO platform of choice. the strategic shift into Perion 1 strategy didn't happen overnight. We've been planning it since late 2023. We believe this shift towards becoming the CMO centralized platform requires more than one product or one quarter. It requires long-term, deliberate transformation. And that's exactly what we've been building at Perion. Over the past 18 months, we've been laying the foundation, reorganizing our structure, unifying our technologies, and aligning our go-to-market strategy with our long-term platform vision. This is both a product evolution and a company-wide transformation. In December 2023, we acquired HiveStack, an advanced multifunctional digital advertising platform that we knew would evolve into the Perion One platform. This also allowed us to enter the exciting world of the global digital out-of-home space that shows great growth. In addition, we appointed key global executives to lead our new platform strategy. At the beginning of 2025, we announced Perion One's strategy and focus on execution. Our strategy is about bringing together all of our technologies and brands under one unified platform that serves the new needs of the digital advertising world in the AI era. We acquired GreenBits, an AI-first company to optimize and improve WorldGarden performance. By that, we extended our TAM and offering to our customers. It initiated a go-to marketing transformation focused on vertical solutions and enterprise clients. Looking ahead to 2026 and beyond, we plan to scale this platform. so that Perian 1 will orchestrate planning, activation, and measurement across all major digital channels. We aim to transition towards a platform-led company, expanding recurring high-margin revenue streams powered by AI-driven insights, self-service capabilities, and creative automation. We aim to improve speed and efficiency, while deepening global adoption across brands, agencies, and retailers, unlocking long-term growth and margin leverage. Each step we take now brings us closer to our vision, a single, intelligent platform that delivers better performance, faster decisions, and long-term value for marketers and shareholders. While this is our long-term journey, we're already seeing the impact of this transformation in our execution, in our innovation, and in the progress we saw this quarter. Let's highlight a few of our most meaningful achievements this quarter. Our non-search revenue, or as we call it, advertising solutions, is up year over year for the first time since Q3 2023. Our retail media, digital of home, and web are up year over year as well. And as for our CTV, which is slightly down, we remain optimistic about our annual growth in this channel. Which brings us to the launch of our new performance CTV solution, a new native feature with the Empyrean One. While Perion was always focused on high-impact CTV ads, now with our performance CTV feature, we are integrating our high-impact technology with a new performance algorithm and measurement capabilities. With this new feature, we focus our activation not only on viewability, but also on actual outcomes. It's been three months since we acquired GreenBits, and our business and tech integrations are fully on track. It is proving to be a strategic fit, as it's already generating new synergies. We are excited by the capabilities that GreenBits added to our AI technology under the Perion-1 suite of solutions. We expanded our programmatic digital out-of-home footprint in APAC with new partnerships in Korea, expanding our reach in a $21 billion market. We are also expanding our reach in EMEA with two new digital out-of-home partnerships in Germany and Italy. All our achievements are not isolated wins. They are milestones coming to life in our journey towards our goal to become a platform of choice for marketers. One of the most exciting milestones this quarter is the launch of our new Performance CTV solution. It brings the precision of performance marketing to connected TV, one of the fastest growing, most premium video channels. Our performance CTV transforms CTV ads into full funnel ROI focused channel activation. By focusing campaigns on the real KPIs and return on ad spent, we're turning what was traditionally an awareness medium into a measurable performance engine. It gives us access to new outcome driven budgets, from advertisers who were previously underserved, especially mid-market brands and retailers looking for high-intent, accountable inventory. It strengthened the Perion One value proposition as it seamlessly integrates with our web, digital out-of-home, algo, and social offerings. This enables unified activation, cross-channel attribution, and platform-wide insights. We believe this new solution positions Perion to capture a greater share in a market projected to exceed $36 billion of ad spend in the US by 2026, as advertisers demand greater accountability from their video investments. I'm proud to share our new Performance CTV clip to showcase this new feature within the Perion One platform.

Imagine connected TV ads that don't just reach audiences but drive real, measurable results. Introducing Perion One Performance CTV, the industry's first high-impact CTV platform for outcomes. From website visits to conversions, access premium inventory, advanced targeting, enhanced creative formats, with transparency and optimization built into one platform. Perion One Performance CTV. Engineered for impact.