Slide 1: The capture & convince company
the capture & convince company Investor Presentation | August 2021
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation and our remarks contain forward-looking statements (within the meaning of The Private Securities Litigation Reform Act of 1995) that involve substantial risks and uncertainties, including statements regarding our expectations and beliefs about our busines
Slide 3: Introduction
Introduction Doron Gerstel Maoz Sigron CEO CFO 3
Slide 4: Sources of growth
Sources of growth Global consumer behavior trends affect digital advertiser spend more time social on social advertising media spend $340B + watch tv on digital screens Display Video / CTV advertising spend = $542B * 2020 2024 more Performance online search shopping advertising spend source: eMarket
Slide 5: 2021 momentum driven by key 2020 revenue drivers
2021 Momentum driven ` $505M* by key 2020 revenue $423M* drivers: $328M • Advertising revenue fueled by broad based $261M adoption of Video and CTV solutions • Increase on performance advertising spent increased number of intent searches 82% YoY • Significantly more dollars spent per campaign GROWTH
Slide 6: 2020 momentum continues into 2021: EBITDA
$61M* 2020 momentum continues into 2021: EBITDA $50M* Perion’s Hub and Spoke Platform enables us to grow our bottom line faster than the top line. 479% YoY $32.8M GROWTH 30%* 30%* $14.3M 25% 33% $66M $2.5M 11% Q2-20 Q2-21 2020 2021 2022 Adjusted EBITDA* Adjusted EBITDA * Reflects midpoint of guidanc
Slide 7: Adj EBITDA expected to grow significantly
Adj EBITDA is Expected to Grow Significantly, as Perion Continues to Drive Costs Efficiencies to the Bottom Line 70.0 35% 30% 30% 60.0 30% 26% 25% $61.0M* 24% 50.0 25% 20% $50.5M* 40.0 20% 30.0 $32.5M $32.8M 15% $28.9M $29.6M 20.0 10% 10.0 5% 0.0 0% 2017 2018 2019 2020 2021 2022 * Reflects midpoint
Slide 8: SG&A % to Revenue continues to decrease
SG&A % to Revenue continues to decrease 26% • Improve Budget control $423M* • Enhance Process automation 21% • Renegotiate commercial terms 18% $328M $274M $253M $261M 15% Revenue SG&A $73M $53M $47M $49M % to revenue 2017 2018 2019 2020 2021 * Reflects midpoint of guidance Non GAAP figures 8
Slide 9: Non-GAAP R&D – Investing in Growth
Non-Gaap R&D – Investing in Growth R&D % to Revenue increased 350 9% to 8%, reflecting Perion 8% 8% 8% 300 Growth strategy, we believe 7% $328M 7% that this is what 250 $274M $261M 6% 6% differentiates our offering $253M 200 5% from competition. 150 4% 3% 100 2% 50 1% $27M $17M $18M $21M 0 0% 2017 2
Slide 10: Improved & Strong Balance Sheet
Improved & Strong BALANCE SHEET $141M Total Net Cash $92M $0 Debt Q1-16 Q1-21 Q2-21 Operating Cash Flow of $14.6M in Q2-22 -$43M Net cash is calculated as cash + cash equivalents + short term bank deposit – short- and long-term loans 10
Slide 11: Financial Strategy: diversification
Financial Strategy: “Additionally, we believe PERI's risk is lower than other open internet ad-driven competitors” diversification To align social display / ctv search $157B $173B $211B source: eMarketer, October 2020 11
Slide 12: Achieving Perion 3 Year Growth Target One Year Early
Achieving Perion 3 Year Growth Target One Year Early* Revenue $505M** $423M** % of revenues Ex TAC 30% $328M $61M** Adjusted $261M EBITDA 26% 25% 30% $32M $33M $50M** 2019 2020 2021 2022 2023 This company's estimates are forward-looking and subject to significant business, economic, regulatory and c
Slide 13: Product strategy: Hub & Spoke Model
Product strategy Hub & Spoke Model 80 Owned & DSP Operated brand sites intelligent social demand product ads supply agency HUB minisites publisher D2S demand supply assets walled garden assets Perion Publisher Audience Graph Generating revenue from both demand and supply sides of the open internet 1
Slide 14: Display & Social Advertising Revenues
Display & 211% $58.0M YoY Why we're Social Advertising GROWTH growing: Revenues 1. Accelerated growth of CTV and video ad spend 2. Intelligent high-impact creative ad units lead to bigger ad spend with us / greater average deal size 3. Business synergy of $18.7M content monetization system / capabil
Slide 15: Growth Drivers: CTV Ad Spend
Growth CTV Ad Spend $18.29B Drivers US, 2019-2024* $16.34B US CTV users in Billions Cross-screen High impact creative Video / CTV >200M 80% of households $14.11B Content monetization system $11.36B source: eMarketer, November 2020 Search Adv. monetization $8.11B CTV viewing times $6.38B ↑81% YOY inc
Slide 16: Growth Drivers: iCTV interactive ad
Growth iCTV interactive ad 40%lift in 85 sec Drivers earned with engaged maximize onscreen engagement engagement users rate based on company's validated with over 100 data/report Perion clients Cross-screen High impact creative Video / CTV capture convince Content monetization system Search Adv. mon
Slide 17: iCTV as part of a multi-screen experience
iCTV Growth Drivers as part of a multi-screen Cross-screen High impact creative Video / CTV experience Content CTV solution served as a monetization system key factor for new customer acquisition and primary contributor to 11% increase Search Adv. monetization in average deal size 17
Slide 18: Publishers are struggling
Publishers are Growth Drivers struggling Digital Magazine Ad Spending US, 2019-2020 -8.8% Cross-screen High impact creative Video / CTV Content monetization system Search Adv. monetization Digital Newspaper Ad Spending US, 2019-2020 -8.4% source: eMarketer, October 2020 18
Slide 19: Content monetization system
content Owned & Operated Growth monetization personalized Drivers system content, layout, and creative Cross-screen High impact creative Video / CTV Content 5-7 min monetization system stay max min revenue Search Adv. cpc per monetization the right session ad at the right time Trend 1: Foods That Ar
Slide 20: Key Growth Drivers: Search Ad Spending
Key Growth Drivers Search Ad Spending* Growth Drivers 1. eCommerce tipping point Worldwide, $222.2B 2020-2024 2. "Search before you buy" $204.5B Cross-screen in Billions High impact creative Video / CTV consumer behavior $185.3B Content monetization 3. A huge growth in $163.4B system online retailer
Slide 21: New monetization opportunities within apps
new monetization Growth Drivers opportunities within apps Cross-screen Check Point High impact creative Video / CTV ZoneAlarm / use case Content monetization system Search Adv. monetization 1 capture 2 Search ads 3 convince 21
Slide 22: Search mediation for publishers
Search mediation Growth Drivers for publishers Cross-screen High impact creative Video / CTV Content monetization system Search Adv. monetization channel chosen contextual match of according to best search results to text chances of action 1 2 Display to Search convince 22
Slide 23: $900M new agreement signed Nov. 2020
signed Nov. 2020 Growth Drivers Cross-screen High impact creative Video / CTV 4year agreement improved revenue share 2021-2024 Content monetization system Search Adv. monetization + = $900M revenue over 4 years * from 6 to 34 countries new products * Company's estimates based on historical revenue u
Slide 24: We saw years' worth of commerce growth in just a few months
Search Advertising Revenues* Growth Drivers As a result, online advertisers' use We saw years' worth of measurable performance- based, cost-per-action buying Cross-screen of commerce growth models made it easier to justify increased investment. High impact creative Video / CTV in just a few months C
Slide 25: Search Advertising ROI
Search Advertising ROI 150% Transactional 140% Search Intent 130% 120% $574K $541K $542K 110% $540K $494K $547K $542K $465k $518K $469K 100% $457K $438K $441K $432K 17.7 16.9 $363K 90% $347K 15.7 Transactional search $314K $307K 12.2 13 12.8 $291K 11.9 10.4 9.5 7.8 80% 70% Avg. Daily Searches (M) Q2
Slide 26: 2021 guidance and introducing 2022 guidance
Based on the strength behind our growth – significantly more dollars spent per campaign and a healthy increase in new clients – we reiterate our improved outlook for 2021 as well as introducing guidance for 2022 - CEO Doron Gerstel, August 3, 2021 2021 Guidance YoY Growth 2022 Guidance YoY Growth Re
Slide 27: Peer Group Comparison
Peer Group Comparison Average CAGR% (2020-2022) 25 21 28 28 24 22 16 7 12 32 EBITDA to Rev Ex TAC 30% 30% 36% 33% 30% 18% 28% 31% 35% 32% Multiples EV/Rev Ex TAC 3 9 25 8 5 4 3 2 4 15 EV/EBITDA 10 24 68 24 15 20 8 6 10 44 data updated to September 1 2021 27
Slide 28: capture&convince
Perion ~ 7 capture&convince
Slide 29: Thank you
thank you
Slide 30: Appendix
appendix 30
Slide 31: Balance Sheet GAAP Basis Overview ($M)
Balance Sheet GAAP Basis Overview ($M) Current Assets 31/12/2020 30/06/2021 Current Liabilities 31/12/2020 30/06/2021 Cash and cash equivalents 47.7 58.2 Current maturities of long-term loans and Convertible debt 8.3 - Restricted cash 1.2 1.2 Accounts payable 72.5 75.1 Short-term bank deposit 12.7 8
Slide 32: Income Statement GAAP Basis ($M)
Income Statement GAAP Basis ($M) P&L - GAAP Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 2018 2019 2020 Display and Social Advertising revenues 29.3 33.2 26.2 37.3 18.6 21.3 21.6 26.4 23.8 18.7 37.9 68.4 38.1 58.0 126.0 87.9 148.7 Search Advertising and other r
Slide 33: Cash Flow GAAP Basis Overview ($M)
Cash Flow GAAP Basis Overview ($M) Cash Flow Results Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 2018 2019 2020 Operating activities Net Income 0.1 1.0 2.2 4.9 1.2 2.9 2.9 5.9 1.3 (2.2) 2.1 9.0 3.3 7.1 8.1 12.9 10.2 Adjustments required to reconcile net income
Slide 34: Non-GAAP Adjustments ($M)
Non-GAAP Adjustments ($M) Reconciliation of GAAP to NON-GAAP Results Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 2018 2019 2020 GAAP Net Income (Loss) from continuing operations 0.1 1.0 2.2 4.9 1.2 2.9 2.9 5.9 1.3 (2.2) 2.1 9.0 3.3 7.1 8.1 12.9 10.2 Share base
Slide 35: P&L Non-GAAP ($M)
P&L Non-GAAP ($M) P&L - Non-GAAP Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 2018 2019 2020 Display and Social Advertising revenues 29.3 33.2 26.2 37.3 18.6 21.3 21.6 26.4 23.7 18.7 37.9 68.4 38.1 58.0 126.0 87.9 148.7 Search Advertising and other revenues 31.