Perion Network Ltd · NASDAQ:PERI
Perion Network — Q4 2021 Earnings Presentation
40 slides from Perion Network's earnings presentation, Feb 9, 2022
Slide 1: Fourth Quarter and Annual 2021 Earnings Conference Call
Fourth Quarter and Annual 2021 Earnings Conference Call February 9th , 2022 1
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: Q4 the momentum continues
Q4 the momentum continues 4
Slide 5: It's Momentum With Powerful, Sustained Tailwinds
It’s Momentum With Powerful, Sustained Tailwinds • A diversified product suite that has achieved breakthrough, go-to- market velocity across our business units • High-impact ad units that drive proven ROI in today’s Attention Economy • An AI-driven Intelligent Hub that builds synergy and turns traff
Slide 6: Further Record Revenues - Where It Matters!
Further Record Revenues - Where It Matters! • Video and CTV growth of 311% 34% $46M in Q4/21 vs. $11M in Q4/20 YoY GROWTH • Average deal size growth of 29% $139K in Q4/21 vs. $108K in Q4/20 $158M • Growth in customer retention to 91% from 86% in Q4/20 $118M Q4 -2020 Q4 2021 6
Slide 7: Continuing Record Profitability
Continuing Record Profitability 93% • Our Hub & Spoke Model Demonstrates YoY $29M Profit Potential of Shared Resources GROWTH • Significant investment in automation and technology paying dividends • Establish offshore operation in India $15M 45%* 35%* Q4 -2020 Q4 2021 2022 * EBITDA/Rev Ex TAC 7
Slide 8: Display advertising is core
Display advertising is core 46% • 31 new CTV clients. YoY 92/412 use CTV – 20% vs. 11% in 2020 GROWTH $100M • High Impact formats drive differentiation • Cross Screen synchronization brings • advertiser value • End to End Video solution – Vidazoo Platfrom • Personalization key to retailer success $6
Slide 9: Innovation – Awareness to Performance
Innovation – Awareness to Performance 73K Intent buying, cross-screen synchronization Products Added To Retailer Cart & connected cart 29% Growth in Average Deal Size Performance to date. Campaign is still live 9
Slide 10: Innovation – Live CTV
Innovation – Live CTV What our advertisers are saying: “…we were looking for something new and exciting. With Perion Live CTV, our ads are integrated into Live CTV advertising that lives inside the game broadcast, making them nearly unmissable!” the sports programming, for full attention OLIVIA SUTH
Slide 11: Innovation – Interactive CTV
Innovation – Interactive CTV What our advertisers are saying: “I like to tap into Perion iCTV because they have unique A win-win for both viewers & advertisers ways to reach our target audience. The ICTV placement was an excellent way to push through holiday and political noise while we launch a new
Slide 12: Innovation – All in One Video monetization platform
Innovation – “All in One” Video monetization platform 50 Publishers are using Vidazoo Platform Outstream Video Player AdServer Syndication & Monetization Pre-roll Monetization
Slide 13: Search Advertising Continues as a Key Driver of Momentum
Search Advertising Continues as a Key Driver of Momentum 16% YoY Increase number of publishers to 114 from 79 GROWTH $58M $50M Daily Averege num of Searches in Millions 18.1 17.5 16 2021 2020 12.4 2019 11.5 7.3 Q4 -2020 Q4 2021 May Dec Sep Nov Aug Q3-21 Mar Feb Jan Jun Oct Apr Jul 13
Slide 14: Intelligent Hub: demand and supply end to end
DEMAND SUPPLY social network brand social platform 1.34M 635M daily spend daily high impact ads requests owned & operated sites 3rd party video & high- display 17M sites agency impact vidazoo platform network operated display sites daily impressions intelligent 1.6B HUB daily video opportunities DSP
Slide 15: iHUB Values
iHUB Values reduced reduced increased operational TAC customer cost closing the loop value 15
Slide 16: Future-Defining Innovation: cookieless targeting
Finally – Future-Defining Innovation: replaces cookies with a superior platform that protects privacy AND delivers ROI 5.93% 5.88% 5.77% 5.46% 5.34% Cookie 4.99% 4.79% Based 4.28% 4.28% 3.68% 2.34% 2.30% 2.30% 2.23% 1.97% 1.94 1.82% 1.84% % 1.52% 1.37% Major Health Senior Large A Leading A Global In
Slide 17: Flywheel
208MM+ privacy first - Cookieless targeting reachable users higher exposur e start 74% here want visible protection seals 42 more more advertisers are spend clicks using SORT FLYWHEEL Additional data Increased Higher Dozens of inbound ROAS Performance leads across AI/ ML advertisers & Modeling publi
Slide 18: Yearly and Quarterly financial results Q4 2021
Yearly and Quarterly financial results Q4 2021 18
Slide 19: 2021 Financial Highlights
2021 Financial Highlights Revenue EBITDA $479M $70M 46% YoY Growth 112% YoY Growth Net Cash From EBITDA to EBITDA to Revenue Operations Revenue ex TAC $71M 221% YoY Growth 18% 10% in 2020 37% 25% in 2020 19
Slide 20: Q4 Record of Revenue
Q4 21 Record of Revenue Q4 21 $158M $118M 34% Q4 20 growth PROFORMA $131M 20% Q4 20 growth $26M 2 0
Slide 21: Q4 display advertising trend
Q4 21 display advertising trend Q4 21 $100M 46% $68M growth Q4 20 23% Q4 20 PROFORMA $82M growth 2 1
Slide 22: Q4 search advertising trend
Q4 21 search advertising trend Q4 21 $58M $50M 16% growth Q4 20 22
Slide 23: 2019-2021 Diversification is Key
2019-2021 Diversification is Key 34% 66% 58% 42% 63% 37% Q419 Q420 Q421 Display Advertising revenue Search Advertising revenue 2 3
Slide 24: Q4 Improved Media Margin
Q4 21 Improved Media Margin Media Margin Media Margin 37% 41% • Product mix improvement • iHub efforts to serve direct Q420 Q421 demand and supply in a closed loop. • Incremental Revenue with low variable cost TAC 63% TAC 59% 2 4
Slide 25: OPEX+COGS to Revenue continues to decrease
OPEX+COGS to Revenue continues to decrease $158M 35% $118M $437.5M* 26% $328M $78M 25% • Enhance Process $261M automation $253M • iHub as a shared infrastructure resource. $31M $40M • Offshoring our operations. $27M Q42019 Q42020 Q42021 Revenue OPEX+COGS % To Revenue 8
Slide 26: Q4 Net income
Q4 21 Net income Q4 21 $17.7M Q4 21 Net income growth 97% Q4 20 $9.0M Q4 21 GAAP EPS Q4 21 $0.44 Q4 21 GAAP EPS $0.30 47% Q4 20 2 6
Slide 27: Q4 NON-GAAP Net income
Q4 21 NON-GAAP Net income Q4 21 $25.3M Q4 21 NON-GAAP Net income growth 83% Q4 20 $13.8M Q4 21 NON-GAAP EPS Q4 21 $0.62 $0.45 Q4 20 27
Slide 28: Q4 Adjusted EBITDA
Q4 21 Adjusted EBITDA Q4 21 $28.9M 89% Q4 20 $15.3M growth Ebitda to Revenue Ebitda to Revenue excluding TAC 13% Ebitda to Revenue 18% 45% Compared to compared to 13% in 2020 35% in 2020 28
Slide 29: Q4 Cash from Operations
Q4 21 Cash from Operations Q4 21 $28.8M 123% Q4 20 $12.9M growth 18% Ebitda to Revenue compared with 13% in 2020 29
Slide 30: Net cash as of December 31, 2021
Net cash as of December 31, 2021 Q1 20 $39.5M • $93M accumulative Cash from operations in 2020 and 2021. Q2 20 • $230M Follow-on in 2021. Q3 20 Q4 20 Q1 21 Q2 21 $156.2M Q3 20 $321.6M Q4 21 30
Slide 31: 2022 the momentum continues
2022 the momentum continues 31
Slide 32: 3D diversified business model
3D diversified business model Hub & Spokes Cross-Channel Our ability to connect all We comfortably operate assets into central across the three main pillars intelligent hub of digital advertising • SORT – $50M of additional • Search Adv Adv. Budget • Social Adv • iHUB - $6M of operational media / TA
Slide 33: Sustainable & predictable business model: 2022 guidance
Sustainable & predictable business model 2022 guidance 30% * $610M- $630M $478M $328M Revenue 29% * EBITDA $88M- $70M $92M 36% $33M 24 EBIDTA to Revenue Ex TAC * At guidance midpoint 2020 2021 2022 331
Slide 34: Thank you
thank you 34
Slide 35: Appendix
appendix 35
Slide 36: Balance Sheet GAAP Basis Overview ($M)
Balance Sheet GAAP Basis Overview ($M) Current Assets 31/12/2020 31/12/2021 Current Liabilities 31/12/2020 31/12/2021 Cash and cash equivalents 47.7 104.4 Current maturities of long-term loans and Convertible debt 8.3 - Restricted cash 1.2 1.1 Accounts payable 72.5 107.7 Short-term bank deposit 12.7
Slide 37: Income Statement GAAP Basis ($M)
Income Statement GAAP Basis ($M) Full year ended, P&L - GAAP Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 2018 2019 2020 2021 Display Advertising revenues 29.3 33.2 26.2 37.3 18.6 21.3 21.6 26.4 23.8 18.7 37.9 68.4 38.1 58.0 69.0 100.2 126.0 87.9 14
Slide 38: Cash Flow GAAP Basis Overview ($M)
Cash Flow GAAP Basis Overview ($M) Full year ended, Cash Flow Results Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 2018 2019 2020 2021 Operating activities Net Income 0.1 1.0 2.2 4.9 1.2 2.9 2.9 5.9 1.3 (2.2) 2.1 9.0 3.3 7.1 10.6 17.7 8.1 12.9 10.2
Slide 39: Non-GAAP Adjustments ($M)
Non-GAAP Adjustments ($M) Full year ended, Reconciliation of GAAP to NON-GAAP Results Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 2018 2019 2020 2021 GAAP Net Income (Loss) from continuing operations 0.1 1.0 2.2 4.9 1.2 2.9 2.9 5.9 1.3 (2.2) 2.1 9.
Slide 40: P&L Non-GAAP ($M)
P&L Non-GAAP ($M) Full year ended, 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 Q3-21 Q4-21 2018 2019 2020 2021 Display 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 69.0 100.2 126.0 87.9 148.7 265.3 S