Perion Network Ltd · NASDAQ:PERI

Perion Network — Investor Presentation (March 2021)

36 slides from Perion Network's investor presentation, March 2021

  1. Slide 1: The capture & convince company

    the capture & convince company Investor Presentation | January 2021 1

  2. 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

  3. Slide 3: Introduction

    Introduction Doron Gerstel Maoz Sigron CEO CFO 3

  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

  5. Slide 5: Sources of growth

    Sources of growth Global consumer behavior trends affecting digital ad spend more time social on social advertising media spend social $340B + watch tv on digital screens CTV display advertising spend = $542B * 2020 2024 more search online advertising shopping spend eComm source: eMarketer, October

  6. Slide 6: 2020 Momentum continues

    15% 2020 Momentum continues YoY GROWTH $370M- $380M $328M 1. Microsoft Bing partnership 2. Synergy from acquisitions 3. Content monetization $261M 4. CTV $253M 5. Intelligent, high-impact creative ad units 31% ‫׈ׁׁٽ‬w ‫׃׈ٽ‬w $84M- $86M $66M $60M $37M-38M ‫ׄخׂ׃ٽ‬w ‫׈خׂ׃ٽ‬w ‫ׇخ׈ٽ‬w ‫׆خ׉ׂٽ‬w ‫ׂخ׆ٽ‬w $7

  7. Slide 7: Total net cash and follow-on offering proceeds

    $118.2M Total Net cash $92M $61M Net proceeds from the follow on offering 86.2 86.9 77.7 64.6 64.4 62.3 60.7 50.2 40.8 39.7 40.5 31 20.8 18.8 16.7 $6.2M 14.6 12.5 10.4 ©ׁׁٌ‫׆‬ ©ׁׂٌ‫׆‬ ©‫׆ׁٌ׃‬ ©ׁٌׄ‫׆‬ ©ׁׁٌ‫ׇ‬ ©ׁׂٌ‫ׇ‬ ©‫ׇׁٌ׃‬ ©ׁٌׄ‫ׇ‬ ©ׁׁٌ‫׈‬ ©ׁׂٌ‫׈‬ ©‫׈ׁٌ׃‬ ©ׁٌׄ‫׈‬ ©ׁׁٌ‫׉‬ ©ׁׂٌ‫׉‬ ©‫׉ׁٌ׃‬ ©ׁٌׄ‫׉‬ ©ׁׂٌ

  8. Slide 8: Strategy: diversification

    Strategy: diversification social display / ctv search $157B $173B $211B source: eMarketer, October 2020 8

  9. Slide 9: Consumer behavior

    consumer behavior - B

  10. Slide 10: Increase brand awareness

    increase meet brand consumer consumer awareness behavior intent enhance engagement level = Advertiser / brand need 10

  11. Slide 11: Social APM

    increase meet social brand consumer consumer Ad Search APM awareness behavior intent monetization enhance engagement level = Advertiser / brand need hi-impact creative = Perion solution optimization 11

  12. Slide 12: Looking ahead: revenue growth plan 2021-2023

    looking AHEAD Revenue 3 year growth plan $500M 2021-2023 $370-380M $328M CAGR $261M 15% ‫ڭ‬ȌǏȲƵɨƵȁɐƵȺ ׁׂ‫ڭ‬ $60M Adjusted ׁ‫ڭ׀‬ EBITDA $37-38M ‫ׄخׂ׃ٽ‬w ‫׈خׂ׃ٽ‬w 2019 2020 2021 2022 2023 ÀǘǞȺƧȌǿȯƊȁɯ‫ز‬ȺƵȺɈǞǿƊɈƵȺƊȲƵǏȌȲɩƊȲƮٌǶȌȌDzǞȁǐƊȁƮȺɐƦǯƵƧɈɈȌȺǞǐȁǞ˛ƧƊȁɈƦɐȺǞȁƵȺȺ‫ة‬ƵƧȌȁȌǿǞƧ‫ة‬ȲƵǐɐǶƊɈȌȲɯƊȁƮƧȌǿȯƵɈǞɈǞɨƵɐȁƧƵ

  13. Slide 13: Hub-Spoke Product Strategy

    Hub-Spoke Product Strategy 80 intelligent Owned & high impact Operated brand sites social intelligent HUB demand product ads publisher supply network agency minisites publisher S ∙ B OL M T D2S O LT C YIELD ∙ SMART STACK ∙ B U T TAG demand supply assets assets walled garden Perion Publisher Audience

  14. Slide 14: 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 Adv. monetization $8.11B ↑81% CTV viewing time $6.38B YOY increase 2019 2

  15. Slide 15: iCTV interactive ad

    Growth Drivers iCTV interactive ad 40% 85 sec maximize onscreen engagement Cross-channel lift in earned with engaged High impact creative engagement users rate validated with over 100 based on company's data/report Perion clients Content monetization system Search Adv. monetization capture convince

  16. Slide 16: iCTV 2.0

    Growth Drivers iCTV 2.0 dynamic creative optimization Cross-channel High impact creative nyc Content monetization female system 30-40 Search Adv. monetization tokyo male 20-25 16

  17. Slide 17: CTV Results

    ◆ CTV Results $64K $102K Growth average average Drivers deal size deal size 64* $6.5M (41**) (10.2%) Cross-channel High impact creative 44* (28**) 132% Content GROWTH monetization system Search Adv. 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 custom

  18. Slide 18: Publishers are struggling

    Growth Publishers are Drivers struggling Digital Magazine Ad Spending US, 2019-2020 -8.8% Cross-channel High impact creative Content monetization system Search Adv. monetization Digital Newspaper Ad Spending US, 2019-2020 -8.4% source: eMarketer, October 2020 18

  19. Slide 19: 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 Adv. cpc per monetization session the right ad at the right time Trend 1: Foods That Are Safe To E

  20. Slide 20: Display & Social Advertising Revenues

    Growth Drivers Display & Social Advertising $68.4M Why we're Revenues growing: back to growth Cross-channel High impact creative despite COVID-19 159% 1. Accelerated growth of GROWTH CTV and video ad spend $37.9M 2. Intelligent high-impact Content creative ad units lead to monetization system bigger

  21. Slide 21: 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" in Billions $204.5B Cross-channel High impact creative consumer behavior $185.3B Content 3. A huge growth in $163.4B monetization system online retailers "hunting"

  22. Slide 22: 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 Adv. monetization 1 capture 2 search ads 3 convince 22

  23. Slide 23: Search mediation for publishers

    Search mediation Growth for publishers Drivers Cross-channel High impact creative 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 23

  24. Slide 24: $800M new Microsoft 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 Adv. monetization + = $800M revenue over 4 years * from 6 to 34 countries new products * Company's estimates based on historical revenue under a prio

  25. Slide 25: Search Advertising Revenues

    Search Advertising Revenues Growth Drivers Why we're growing: daily number 1. New agreement with Bing at better terms of searches (M) Cross-channel 2. Collaboration with additional leading 15.7 High impact creative search providers which will drive multiple 13 12.8 11.9 12.2 growth opportunities 10.

  26. Slide 26: 5 Ways the Future Points to Bing Collaboration

    5 Ways the Future Points to $500M Bing Collaboration 4-year contract with improved revenue share Skilled and$328M R hyper-focused over $9m on average CAG SG&A cost saving 15% management during the last 3 years, $261M per year Technology Prowess Resilient tech moat around advertising and search solut

  27. Slide 27: Company's Guidance

    Company’s Guidance ٗ§ƵȲǞȌȁ‫ز‬ȺǿȌǿƵȁɈɐǿǞȺƦƵǞȁǐƮȲǞɨƵȁƦɯȌɐȲƊƦǞǶǞɈɯɈȌȲƊȯǞƮǶɯƦƵȁƵ˛ɈǏȲȌǿȺǘǞǏɈȺǞȁ ȺȯƵȁƮǞȁǐƊƧȲȌȺȺɈǘƵ‫׃‬ǿƊǞȁȯǞǶǶƊȲȺȌǏƮǞǐǞɈƊǶƊƮɨƵȲɈǞȺǞȁǐ‫ى‬ƮǞȺȯǶƊɯ‫ة‬ɨǞƮƵȌƊȁƮ!Àß‫ة‬ȺȌƧǞƊǶ ƊƮɨƵȲɈǞȺǞȁǐ‫ة‬ƊȺɩƵǶǶƊȺɈǘƵǐȲȌɩǞȁǐȺȯƵȁƮȌǏȺƵƊȲƧǘƊƮɨƵȲɈǞȺǞȁǐ‫٘خ‬²ƊǞƮ(ȌȲȌȁJƵȲȺɈƵǶ‫ة‬ §ƵȲǞȌȁٚȺ!0„‫ ٗخ‬ƊȺƵƮȌȁɈǘƵȺɈȲȌȁǐƦɐȺǞȁƵȺȺǿȌǿƵȁ

  28. Slide 28: Peer Group Comparison

    Peer Group Comparison 2021 2022 Avg. 36.6 27.8 22.9 19.6 15.9 26.1 20.0 13.1 10.7 13.2 10.7 9.3 EV / Revenue 1.5 1.5 1.6 1.4 2.0 1.8 114.6 84.3 114.0 110.2 81.2 59.6 70.5 77.6 55.7 46.3 54.5 41.7 15.8 14.1 18.5 16.8 EV / EBITDA 5.6 5.5 31.9% 26.6% 27.4% 20.1% 23.7% 22.0% 15.2% 9.9% 10.7% EBITDA % 31

  29. Slide 29: Capture & convince

    Perion ~ 7 capture&convince

  30. Slide 30: Thank you

    thank you 30

  31. Slide 31: Appendix

    appendix 31

  32. Slide 32: Balance Sheet GAAP Basis Overview ($M)

    Balance Sheet GAAP Basis Overview ($M) Current Assets 31/12/2019 31/12/2020 Current Liabilities 31/12/2019 31/12/2020 Cash and cash equivalents 38.4 47.7 Current maturities of long-term loans and Convertible debt 8.3 8.3 Restricted cash 1.2 1.2 Accounts payable 47.7 72.5 Short-term bank deposit 23.2

  33. Slide 33: 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 2018 2019 2020 Advertising Display & Social Advertising 29.3 33.2 26.2 37.3 18.6 21.3 21.6 26.4 23.8 18.7 37.9 68.4 126.0 87.9 148.7 Search and other & other Search Ad

  34. Slide 34: 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 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 8.1 12.9 10.2 Adjustments required to reconcile net income to

  35. Slide 35: 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 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 8.1 12.9 10.2 Share based c

  36. Slide 36: 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 2018 2019 2020 Advertising Display & Social Advertising 29.3 33.2 26.2 37.3 18.6 21.3 21.6 26.4 23.7 18.7 37.9 68.4 126.0 87.9 148.7 Search Search and other & other Advertising 3

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