Perion Network Ltd · NASDAQ:PERI
Perion Network — Investor Presentation (January 2021)
29 slides from Perion Network's investor presentation, January 2021
Slide 1: The capture & convince company
the capture & convince company Investor Presentation | January 2021 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 4
Slide 4: Huge TAM (and getting huger)
Huge TAM (and getting huger) $542.34B $497.19B $449.31B $395.49B $339.71B adtech cloud services >1/2 online gaming cyber security online education $396B Trillion $235B $231B $247B 2020 2021 2022 2023 2024 * ** *** **** digital ad spending worldwide, 2020-2024 in Billions source: eMarketer, October 2
Slide 5: Sources of growth
Sources of growth Global consumer behavior trends affecting market size social $340B + CTV = $542B * 2020 2024 eComm source: eMarketer, October 2020 * TAM digital ad spending worldwide for years 2021 through 2024 are estimations and could materially change. 6
Slide 6: Steady growth despite pandemic recession
$322M steady GROWTH >23% despite pandemic recession $112.5M YOY GROWTH 44% $83M $261M GROWTH $253M $78M $64M $66M $66M $60M $54M $14.75M $12.2M 21% $32.2M YOY $29.6M $32.4M $7.6M $8.7M GROWTH $5.1M $7.4M $6.2M $2.5M Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 2018 2019 2020 Preliminary (unaudite
Slide 7: Improved & Strong Balance Sheet
Improved & Strong BALANCE SHEET $92.5M 86.2 86.9 77.7 64.6 64.4 62.3 60.7 50.2 40.8 39.7 40.5 $37.1M Net Cash* 31 20.8 18.8 16.7 14.6 $10.4M Debt 12.5 10.4 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q1-16 Q3-20 Total Cash $60M -$
Slide 8: Financial Strategy: Diversification
search Financial Strategy: $211B DIVERSIFICATION $157B Perion is well-positioned social $173B display to capitalize on any shifting budget source: eMarketer, October 2020 social advertising display advertising search advertising 9
Slide 9: Looking Ahead: Revenue growth plan 2021-2023
looking AHEAD Revenue 3 year growth plan $500M 2021-2023 $70M inorganic CAGR ganic r $322M 10% o min % of revenues $60M 12% Adjusted EBITDA** 10% $32.2M 2020 2021 2022 2023 Preliminary (unaudited) This company's estimates are forward-looking and subject to significant business, economic, regulatory
Slide 10: Business Strategy: Capture & Convince
Business Strategy: capture&convince Target the right audience Maximize return on ad spend Cross-channel Content Search ad High impact creative monetization monetization system 11
Slide 11: Growth Drivers: CTV Ad Spend
Growth Drivers CTV Ad Spend $18.29B US, 2019-2024* in Billions $16.34B >200M US CTV users Cross-channel High impact creative $14.11B 80% of households Content monetization system $11.36B source: eMarketer, November 2020 Search ad monetization $8.11B ↑81% CTV viewing time $6.38B YOY increase 2019 202
Slide 12: iCTV interactive ad
Growth Drivers iCTV interactive ad maximize onscreen engagement 40%lift in 85 sec earned with engaged engagement users rate validated with over 100 based on company's data/report Perion clients Cross-channel High impact creative capture Content monetization convince system Search ad monetization 13
Slide 13: CTV Results
CTV Results* $64K $102K Growth average average Drivers deal size deal size 64 $6.5M (10.2%) Cross-channel High impact creative 44 232% Content GROWTH monetization system Search ad monetization $2.8M (7.4%) $0.6M (3.2%) 5 Q2-20 Q3-20 Q4-20 Q2-20 Q3-20 Q4-20 Unaudited New CTV customers Revenues ($M) S
Slide 14: Publishers are struggling
Growth Publishers Drivers are struggling Digital Magazine Ad Spending US, 2019-2020 -8.8% Cross-channel High impact creative Content monetization system Search ad monetization Digital Newspaper Ad Spending US, 2019-2020 -8.4% source: eMarketer, October 2020 15
Slide 15: Content monetization system
content Owned & Operated Growth monetization personalized Drivers system content, layout, and creative Cross-channel High impact creative Content monetization 5-7 min system stay max min revenue Search ad cpc per monetization session the right ad at the right time capture new audience predictive ana
Slide 16: Advertising Results
Growth Drivers Advertising Results $64M* Why we're back to growth growing: despite COVID-19 Cross-channel High impact creative 241% 1. Accelerated growth of GROWTH CTV and video ad spend $37.9M 2. Significant improvement Content of the advertising monetization system business performance 3. Business
Slide 17: Key Growth Drivers: Search Ad Spending
Key Growth Drivers Search Ad Spending* Growth Drivers 1. eCommerce Tipping point Worldwide, $222.26 2020-2024 2. Search before you buy in Billions $204.58 Cross-channel High impact creative behavior $185.34 Content 3. A huge growth in $163.42 monetization system online retailers "hunting" for new cu
Slide 18: New monetization opportunities within apps
Growth new monetization Drivers opportunities within apps Cross-channel High impact creative Check Point ZoneAlarm / use case Content monetization system Search ad monetization 1 capture 2 search ads 3 convince 19
Slide 19: Search mediation for publishers
Search mediation Growth for publishers Drivers Cross-channel High impact creative Content monetization system Search ad monetization 1 2 Display to Search convince 20
Slide 20: $800M new agreement signed Nov. 2020
signed Nov. 2020 Growth Drivers Cross-channel High impact creative 4year agreement 2021-2024 improved revenue share Content monetization system Search ad monetization + = $800M revenue over 4 years * from 6 to 34 countries new products * Company's estimates based on historical revenue under a prior
Slide 21: Bending the curve
bending the curve Growth Drivers Why we're growing: 1. New agreement with Bing at better terms 15.7 Cross-channel 2. Collaboration with additional leading search providers 13 12.8 11.9 12.2 High impact creative which will drive multiple growth opportunities 10.4 9.5 7.8 3. New products’ introduction
Slide 22: Ways the Future Points to $500M
5 Ways the Future Points to $500M $70M Bing Collaboration 4-year contract with inorganic improved revenue share Skilled and CAGR over $9m on average anic $322M hyper-focused % o r g in 10 SG&A cut during the management mlast 3 years, per year Technology Prowess Resilient tech moat around advertising
Slide 23: Thank you
thank you 24
Slide 24: Appendix
appendix 25
Slide 25: Balance Sheet Overview
Balance Balance Sheet Sheet Overview GAAP Basis Overview ($M) ($M) Current Assets 31/12/2019 30/09/2020 Current Liabilities 31/12/2019 30/09/2020 Cash and cash equivalents 38.4 51.7 Current maturities of long-term loans and Convertible debt 8.3 20.8 Restricted cash 1.2 1.2 Accounts payable 47.7 48 S
Slide 26: Income Statement GAAP Basis ($M)
Income Statement GAAP Basis ($M) Income Statement GAAP Basis ($M) Full year ended, 9 Months 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 2017 2018 2019 2019 2020 Advertising 29.3 33.2 26.2 37.3 18.6 21.3 21.6 26.4 23.8 18.7 37.9 134.5 126.0 87.9 61.5 80.3 Searc
Slide 27: Cash Flow Overview ($M)
Cash Flow GAAP Basis Overview ($M) Cash Flow Overview ($M) Full year ended, 9 Months ended, Cash Flow Results Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 2017 2018 2019 2019 2020 Operating activities Net Income 0.1 1.0 2.2 4.9 1.2 2.9 2.9 5.9 1.3 (2.2) 2.1 (72.8) 8.1 12.9 7.0 1
Slide 28: Non-GAAP Adjustments ($M)
Non-GAAP Adjustments ($M) Non-GAAP Adjustments ($M) Full year ended, 9 Months 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 2017 2018 2019 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
Slide 29: Preliminary Non-GAAP Adjustments ($M)
Preliminary Non-GAAP Adjustments ($M) Preliminary Non-GAAP Adjustments ($M) Perliminary low Range Perliminary high Range Reconciliation of GAAP to NON-GAAP Results Q4-20 2020 Q4-20 2020 GAAP Net Income (Loss) from continuing operations 5,155 6,379 5,602 6,826 Share based compensation 1,500 4,413 1,5
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