Perion Reports First Quarter 2026 Results

About this update from Perion Network Ltd

Perion Network Ltd . (NASDAQ and TASE: PERI ), an advanced technology leader solving for the complexities of digital advertising through AI-native execution infrastructure, today reported its financial results for the first quarter ended March 31, 2026. “During the quarter, we continued to advance the Perion One platform and our Outmax AI Agent technology, with encouraging adoption from customers and new global partnerships. We extended Outmax into a new social channel with its launch on TikTok, and formed an exclusive partnership in Africa, adding a new distribution channel in this high-growth digital advertising market,” said Tal Jacobson, Perion’s CEO. Mr. Jacobson added, “Perion’s vision is centered on fully integrating AI across every facet of our business. We are leveraging AI not only as the core engine that drives higher ROI and measurable outcomes for our customers, but also internally to streamline our operations, optimize our cost structure, and drive greater efficiency across the company.” First Quarter 2026 Business and Financial Highlights Growth engines performance: Outmax AI agent adoption - spend 1 increased by 316% YoY CTV spend increased 68% YoY DOOH spend increased 29% YoY Retail Media 2 vertical spend increased 27% YoY Perion One spend increased 6% YoY Total revenue of $90.4 million, increased 1% YoY Total contribution ex-TAC remained flat YoY at $39.7 million, with a 44% margin Adjusted EBITDA of $0.5 million Cash flow from operations of $6.7 million, adjusted free cash flow of $7.0 million Repurchased 2.5 million shares for a total of $24.1 million Expanded partnerships and integrations: Exclusive Outmax partnership in Africa with Mediamark and McSorely Media Outmax AI agent now available for TikTok Bouygues Telecom adopts Outmax First Quarter 2026 Financial Highlights 3 In millions, except per share data Three months ended   March 31,   2026     2025     % Advertising Solutions Revenue $ 66.7     $ 69.7     (4 %) Search Advertising Revenue $ 23.7     $ 19.6     21 % Total Revenue $ 90.4     $ 89.3     1 % Contribution ex-TAC (Revenue ex-TAC) $ 39.7     $ 39.7     0 % GAAP Net loss $ (10.0 )   $ (8.3 )   (20 %) Non-GAAP Net Income $ 4.8     $ 5.4     (11 %) Adjusted EBITDA $ 0.5     $ 1.8     (75 %) Adjusted EBITDA to Contribution ex-TAC   1 %     5 %     Net Cash from Operations $ 6.7     $ (7.1 )   NM   Adjusted Free Cash Flow $ 7.0     $ (6.1 )   NM   GAAP Diluted EPS $ (0.26 )   $ (0.19 )   (37 %) Non-GAAP Diluted EPS $ 0.11     $ 0.11     0 %                 Financial Outlook for Full-Year 2026 4 Based on current expectations, the Company is reiterating its full-year 2026 outlook ranges: Contribution ex-TAC 5 of $215 to $235 million Adjusted EBITDA 5 of $50 to $54 million Share Repurchase Program During the first quarter of 2026, the Company repurchased a total of 2.5 million shares for a total amount of $24.1 million As of March 31, 2026, under the authorized $200 million share repurchase plan, the Company repurchased a total of 15.3 million shares for a total amount of $142.2 million Financial Comparison for the First Quarter of 2026 Revenue: Revenue increased by 1% to $90.4 million in the first quarter of 2026 from $89.3 million in the first quarter of 2025. Advertising Solutions revenue decreased 4% year-over-year, accounting for 74% of revenue, primarily due to decline in our Web channel, partially offset by an increase in CTV and Digital Out of Home channels. Search Advertising revenue increased by 21% year-over-year, accounting for 26% of revenue. Traffic Acquisition Costs and Media Buy (“TAC”): TAC amounted to $50.7 million, or 56% of revenue, in the first quarter of 2026, compared with $49.7 million, or 56% of revenue, in the first quarter of 2025. GAAP Net Loss: GAAP net loss was $10.0 million in the first quarter of 2026, compared with $8.3 million in the first quarter of 2025. Non-GAAP Net Income : Non-GAAP net income was $4.8 million, or 5% of revenue, in the first quarter of 2026, compared with $5.4 million, or 6% of revenue, in the first quarter of 2025. A reconciliation of GAAP to non-GAAP net income is included in this press release. Adjusted EBITDA : Adjusted EBITDA was $0.5 million, or 1% of revenue and 1% of Contribution ex-TAC in the first quarter of 2026, compared with $1.8 million, or 2% of revenue and 5% of Contribution ex-TAC in the first quarter of 2025. A reconciliation of GAAP income from operations to Adjusted EBITDA is included in this press release. Cash Flow from Operations : Net cash provided by operating activities in the first quarter of 2026 was $6.7 million, compared with net cash used in operating activities of $7.1 million in the first quarter of 2025. Net cash : As of March 31, 2026, cash and cash equivalents, short-term bank deposits and marketable securities, amounted to $293.0 million, compared with $312.9 million as of December 31, 2025. Conference Call Perion’s management will host a conference call to discuss the results at 8:30 a.m. ET today: Registration link: https://perion-q1-2026-earnings-call.open-exchange.net A replay of the call and a transcript will be available within approximately 24 hours of the live event on Perion’s website . About Perion Network Ltd. Perion helps brands, agencies, and retailers maximize the value of their advertising investments with advanced AI and creative technologies. Its unified platform, Perion One, bridges media, data, and performance across digital channels to deliver superior results in an increasingly complex advertising environment. For more information, visit www.perion.com Non-GAAP Measures Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude certain items. This press release includes certain non-GAAP measures, including Contribution ex-TAC, Adjusted EBITDA, Adjusted free cash flow, Non-GAAP net income and non-GAAP diluted earnings per share. Contribution ex-TAC presents revenue reduced by traffic acquisition costs and media buy, reflecting a portion of our revenue that must be directly passed to publishers or advertisers and presents our revenue excluding such items. We believe Contribution ex-TAC is a useful measure in assessing the performance of the Company because it facilitates a consistent comparison against our core business without considering the impact of traffic acquisition costs and media buy related to revenue reported on a gross basis. Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) is defined as GAAP income (loss) from operations excluding stock-based compensation expenses, retention and other acquisition-related expenses, unusual legal costs, gains and losses recognized with respect to changes in fair value of contingent consideration, amortization of acquired intangible assets, restructuring costs and other charges as well as depreciation. Adjusted free cash flow is defined as net cash provided by (or used in) operating activities less cash used for the purchase of property and equipment, net of sales and capitalized software development costs, but excluding the purchase of property and equipment related to our new corporate headquarter office, the portion of the cash payment of contingent consideration in excess of the acquisition date fair value and retention payment related to acquisitions, as we do not view either of those expenses as reflective of our normal on-going expenses. It is important to note that these expenses are in fact cash expenditures. Non-GAAP net income and non-GAAP diluted earnings per share are defined as GAAP net income (loss) and GAAP net earnings (loss) per share excluding stock-based compensation expenses, amortization of acquired intangible assets and the related taxes thereon, retention and other acquisition-related expenses, unusual legal costs, gains and losses recognized with respect to changes in fair value of contingent consideration, restructuring costs and other charges as well as foreign exchange gains and losses associated with ASC-842. The purpose of such adjustments is to give an indication of our performance exclusive of non-cash charges and other items that are considered by management to be outside of our core operating results. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Furthermore, the non-GAAP measures are regularly used internally to understand, manage and evaluate our business and make operating decisions, and we believe that they are useful to investors as a consistent and comparable measure of the ongoing performance of our business. However, our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these projected measures, together with some of the excluded information not being ascertainable or accessible, we are unable to quantify certain amounts that would be required for such presentation without unreasonable effort. Consequently, no reconciliation of the forward-looking non-GAAP financial measures is included in this press release. A reconciliation between results on a GAAP and non-GAAP basis is provided in the last table of this press release. Forward Looking Statements This press release contains historical information and forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the safe- harbor provisions of the Private Securities Litigation Reform Act of 1995 with respect to the business, financial condition and results of operations of Perion. The words “will,” “believe,” “expect,” “intend,” “plan,” “should,” “estimate” and similar expressions are intended to identify forward-looking statements. Such statements reflect the current views, assumptions and expectations of Perion with respect to future events and are subject to risks and uncertainties. All statements other than statements of historical fact included in this press release are forward-looking statements. Many factors could cause the actual results, performance or achievements of Perion to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, or financial information, including, but not limited to, political, economic and other developments (including the current war between Israel and Hamas and other armed groups in the region), the failure to realize the anticipated benefits of companies and businesses we acquired and may acquire in the future, risks entailed in integrating the companies and businesses we acquire, including employee retention and customer acceptance, the risk that such transactions will divert management and other resources from the ongoing operations of the business or otherwise disrupt the conduct of those businesses, and general risks associated with the business of Perion including, loss of, or reduction in our business with, key customers or other partners that are material to our business, the impact of the rapid development and broad adoption of generative AI on our business, the transformation in our strategy, intended to unify our business units under the Perion brand (Perion One), intense and frequent changes in the markets in which the businesses operate and in general economic and business conditions (including the fluctuation of our share price), armed conflicts with Iran and other parties, the outcome of any pending or future proceedings against Perion, data breaches, cyber-attacks and other similar incidents, unpredictable sales cycles, competitive pressures, market acceptance of new products and of the Perion One strategy, changes in applicable laws and regulations as well as industry self-regulation, negative or unexpected tax consequences, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, whether referenced or not referenced in this press release. We urge you to consider those factors, together with the other risks and uncertainties described in our most recent Annual Report on Form 20-F for the year ended December 31, 2025 as filed with the Securities and Exchange Commission (SEC) on March 16, 2026, and our other reports filed with the SEC, in evaluating our forward-looking statements and other risks and uncertainties that may affect Perion and its results of operations. Perion does not assume any obligation to update these forward-looking statements. PERION NETWORK LTD. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS   In thousands (except share and per share data) Three months ended March 31,   2026       2025   (Unaudited) (Unaudited)   Revenue Advertising Solutions $ 66,703   $ 69,705   Search Advertising   23,671     19,637   Total Revenue   90,374     89,342     Costs and Expenses Cost of revenue   12,318     12,341   Traffic acquisition costs and media buy   50,695     49,681   Research and development   6,949     8,452   Selling and marketing   21,367     17,725   General and administrative   9,408     9,376   Change in fair value of contingent consideration   225     -   Depreciation and amortization   4,900     3,472   Restructuring costs and other charges   -     1,322   Total Costs and Expenses   105,862     102,369     Loss from Operations   (15,488 )   (13,027 ) Financial income, net   2,277     3,407   Loss before Taxes on income   (13,211 )   (9,620 ) Tax benefit   3,210     1,274   Net loss $ (10,001 ) $ (8,346 )   Net loss per Share Basic $ (0.26 ) $ (0.19 ) Diluted $ (0.26 ) $ (0.19 )   Weighted average number of shares Basic   39,102,892     44,866,925   Diluted   39,102,892   44,866,925 PERION NETWORK LTD. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS   In thousands       March 31,   December 31,     2026       2025     (Unaudited)   (Audited) ASSETS       Current Assets       Cash and cash equivalents $ 52,057   $ 89,997   Restricted cash   1,184     1,176   Short-term bank deposits   173,354     151,030   Marketable securities   67,560     71,877   Accounts receivable, net   150,779     187,871   Prepaid expenses and other current assets   25,433     17,830   Total Current Assets   470,367     519,781     Long-Term Assets Property and equipment, net   14,152     11,685   Operating lease right-of-use assets   16,297     17,171   Goodwill and intangible assets, net   351,084     355,235   Deferred taxes   13,724     9,266   Other assets   567     620   Total Long-Term Assets   395,824     393,977   Total Assets $ 866,191   $ 913,758     LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable $ 113,888   $ 129,882   Accrued expenses and other liabilities   33,987     37,821   Short-term operating lease liability   1,663     2,324   Deferred revenue   1,173     1,206   Short-term payment obligation related to acquisitions   16,938     17,348   Total Current Liabilities   167,649     188,581     Long-Term Liabilities Payment obligation related to acquisition   10,499     10,383   Long-term operating lease liability   19,743     20,034   Deferred taxes   7,109     7,397   Other long-term liabilities   11,633     11,357   Total Long-Term Liabilities   48,984     49,171   Total Liabilities   216,633     237,752     Shareholders' equity Ordinary shares   327     341   Additional paid-in capital   471,697     487,716   Treasury shares at cost   (1,002 )   (1,002 ) Accumulated other comprehensive gain (loss)   (147 )   267   Retained earnings   178,683     188,684   Total Shareholders' Equity   649,558     676,006   Total Liabilities and Shareholders' Equity $ 866,191   $ 913,758       PERION NETWORK LTD. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS   In thousands   Three months ended March 31,   2026       2025   (Unaudited) (Unaudited)   Cash flows from operating activities Net loss $ (10,001 ) $ (8,346 ) Adjustments required to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization   4,900     3,472   Stock-based compensation expense   8,020     7,587   Foreign currency translation   3     10   Accrued interest, net   3,321     2,914   Deferred taxes, net   (4,749 )   3,318   Accrued severance pay, net   71     (998 ) Restructuring costs and other charges   -     1,322   Gain from sale of property and equipment   (12 )   (24 ) Net changes in operating assets and liabilities   5,102     (16,305 ) Net cash provided by (used in) operating activities $ 6,655   $ (7,050 )   Cash flows from investing activities Purchases of property and equipment, net of sales   (251 )   (1,698 ) Capitalized software development costs   (2,118 )   -   Investment in marketable securities, net of sales   4,170     11,571   Short-term deposits, net   (22,324 )   (1,983 ) Net cash provided by (used in) investing activities $ (20,523 ) $ 7,890     Cash flows from financing activities Proceeds from exercise of stock-based compensation   33     17   Repurchase of shares for retirement   (24,086 )   (6,501 ) Net cash used in financing activities $ (24,053 ) $ (6,484 )   Effect of exchange rate changes on cash and cash equivalents and restricted cash   (11 )   144   Net decrease in cash and cash equivalents and restricted cash   (37,932 )   (5,500 ) Cash and cash equivalents and restricted cash at beginning of period   91,173     157,362   Cash and cash equivalents and restricted cash at end of period $ 53,241   $ 151,862     PERION NETWORK LTD. AND ITS SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP RESULTS   In thousands   Three months ended March 31,   2026       2025   (Unaudited)   Revenue $ 90,374   $ 89,342   Traffic acquisition costs and media buy   50,695     49,681   Contribution ex-TAC $ 39,679   $ 39,661       Three months ended March 31,   2026       2025   (Unaudited)   GAAP loss from Operations $ (15,488 ) $ (13,027 ) Stock-based compensation expenses   8,020     7,587   Retention and other acquisition related expenses   2,550     1,878   Unusual legal costs   248     564   Change in fair value of contingent consideration   225     -   Amortization of acquired intangible assets   4,152     2,914   Restructuring costs and other charges   -     1,322   Depreciation   748     558   Adjusted EBITDA $ 455   $ 1,796   PERION NETWORK LTD. AND ITS SUBSIDIARIES   RECONCILIATION OF GAAP TO NON-GAAP RESULTS In thousands (except share and per share data) Three months ended March 31,   2026       2025   (Unaudited)       GAAP Net loss $ (10,001 ) $ (8,346 ) Stock-based compensation expenses   8,020     7,587   Amortization of acquired intangible assets   4,152     2,914   Retention and other acquisition related expenses   2,550     1,878   Unusual legal costs   248     564   Change in fair value of contingent consideration   225     -   Restructuring costs and other charges   -     1,322   Foreign exchange losses (gains) associated with ASC-842   94     (361 ) Taxes on the above items   (505 )   (188 ) Non-GAAP Net Income $ 4,783   $ 5,370     Non-GAAP diluted earnings per share $ 0.11   $ 0.11     Shares used in computing non-GAAP diluted earnings per share   43,154,462     49,056,439   PERION NETWORK LTD. AND ITS SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP RESULTS In thousands Three months ended March 31,   2026       2025   (Unaudited)   Net cash provided by (used in) operating activities $ 6,655   $ (7,050 ) Purchases of property and equipment, net of sales   (251 )   (1,698 ) Capitalized software development costs   (2,118 )   -   Free cash flow $ 4,286   $ (8,748 ) Purchase of property and equipment related to our new corporate headquarter office   -     1,337   Retention payment related to acquisitions   2,700     1,300 6   Adjusted free cash flow $ 6,986   $ (6,111 ) PERION NETWORK LTD. AND ITS SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP FULL YEAR 2026 GUIDANCE   In thousands     Low   High   Revenue $ 460 $ 490 Traffic acquisition costs and media buy   245   255 Contribution ex-TAC $ 215 $ 235 1 On a proforma basis 2 Re tail Media revenue includes several media channels, such as CTV, DOOH and others 3 Co ntribution ex-TAC, non-GAAP Net Income, Adjusted EBITDA, Adjusted Free Cash Flow and non-GAAP Diluted EPS are non-GAAP measures. See below reconciliation of GAAP to non-GAAP measures. Numbers may not add up due to rounding. 4 We have not provided an outlook for GAAP Income from operations or reconciliation of Adjusted EBITDA guidance to GAAP Income from operations, the closest corresponding GAAP measure, because we do not provide guidance for certain of the reconciling items on a consistent basis due to the variability and complexity of these items, including but not limited to the measures and effects of our stock-based compensation expenses directly impacted by unpredictable fluctuation in our share price and amortization in connection with future acquisitions. Hence, we are unable to quantify these amounts without unreasonable efforts. 5 Co ntribution ex-TAC, non-GAAP Net Income, Adjusted EBITDA and non-GAAP Diluted EPS are non-GAAP measures. See below reconciliation of GAAP to non-GAAP measures. 6 An acquisition-related retention payment in the amount of $1.3M was made in Q1 2025. We have added this item back in our calculation of free cash flow, as we do not consider it indicative of ongoing operating performance absent acquisition activity. View source version on businesswire.com: https://www.businesswire.com/news/home/20260520875705/en/

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