Perion Network Ltd · NASDAQ:PERI
Perion Network — LD Micro Conference 2012
27 slides from Perion Network's conference presentation, Dec 5, 2012
Slide 1: LD Micro Conference
LD Micro Conference (NASDAQ: PERI) Josef Mandelbaum, CEO December 5, 2012
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains historical information and forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 with respect to the business, financial condition and results of operations of the Company. The words “believe,” “expect,”
Slide 3: Perion Investment Highlights
Perion Investment Highlights 1. PROVEN • 50%+ revenue growth expected TRACK from 2011 to 2012 $120 Revenue Growth (in $M) RECORD • Will exceed 2012 guidance of $55M in revenue $100 $100 + 2. STRONG • 2013 revenues to exceed $100M $80 FUTURE Total growth of at least 80% GROWTH Organic growth of a
Slide 4: What We Do
What We Do We develop consumer applications that make the everyday life of our consumer safer, simpler and more enjoyable. Smilebox: Creating and SweetPacks: Expressive IncrediMail: Gmail, sharing photo keepsakes content and utility apps Yahoo, Outlook and Facebook all in one 4
Slide 5: Our IncrediMail Product
Our IncrediMail Product IncrediMail: Gmail, Yahoo, Outlook and Facebook all in one • Unified messaging application that allows you to personalize and better organize all of your email and Facebook accounts • Viral and available in 100 countries and 8 different languages • 4M+ installed base 2M Incr
Slide 6: Our Smilebox Product
Our Smilebox Product Smilebox: Photo Creations and Sharing • Easy-to-use service that quickly turns photos into digital keepsakes for sharing with close friends and family • 20M installs to date • 505K+ Facebook Fans • Viral with 80%+ US customers • Mobile app launched in September 2011, over 800K d
Slide 7: Our SweetPacks Product
Our SweetPacks Product SweetPacks: Utilities and Expressive Content • A variety of free, fun and safe content based apps for everyday use Expressive content shared via Webmail, Facebook and Instant messaging clients • 150 million downloads to date • Over 22 million monthly active users 2.5 milli
Slide 8: Our Business Model: Freemium
Our Business Model: Freemium 1. Consumers visit our 2. Free downloads are 3. … With a percentage of website and download free monetized through users up-selling to a version of product search & advertising… premium offer 18,000 Revenue Breakdown 16,000 (in $ thousands) 14,000 33% 12,000 10,000 43% 4
Slide 9: Advertising & Search: How Does It Work?
Advertising & Search: How Does It Work? User downloads our product for free… During download user designates us as the default search provider and home page User searches online as usual, clicking on a sponsored link on the results page, generates revenues for Google, who in turn pays us share o
Slide 10: Premium: What Is It?
Premium: What Is It? 1. Additional features or content only accessible via a premium up-sell 3%-5%of our dedicated users upgrade to premium subscriptions 2011 Premium sales $8M, expected to increase to $18M+ in 2012! 2. Pricing Smilebox annual subscription = $39.99 Smilebox monthly subscript
Slide 11: Growth Strategy
Growth Strategy Qrion
Slide 12: Growth Catalysts
Growth Catalysts Several factors will drive growth in the near future: • Increased media buying with strong ROI • Extensions of our products on mobile, especially tablets • New successful and accretive product focused acquisitions • Improved systems will enable us to leverage our data and distributi
Slide 13: Search Query & Revenue Trend
Search Query & Revenue Trend +109% in average daily revenue from January 2012 13
Slide 14: Search Is a Growing Market
Search Is a Growing Market $40.0 Google Revenue Growth $35.0 $10.4 $30.0 $9.0 $25.0 $8.8 $20.0 $7.2 $15.0 $26.1 $22.6 $10.0 $19.4 $15.7 $5.0 $0.0 2009 2010 2011 Q1-Q3'12 Google-owned websites Google Network websites Search market is growing at 15-20% annually Google AdSense Partners Google makes
Slide 15: Mobile - Platform of the Future
Mobile - Platform of the Future • “Hockey stick” curve in tablets and smartphones – tipping point was late 2011 • Tablet ownership doubled with 30 - 64 year olds in May 2011 and again in January 2012 • Over 2 billion smartphones by end of 2013 • Already over 800K downloads of our Smilebox app • Revo
Slide 16: Growth through Acquisitions
Growth through Acquisitions Proven Expertise • Acquisition strategy: Orphaned companies are attractive ‐ Finding orphaned companies with existing profits and growth potential by leveraging our assets ‐ Disciplined in both pace and integration of acquisitions ‐ Primary focus on companies with product
Slide 17: SweetPacks: An Attractive Financial Transaction with Strong Strategic Benefits
SweetPacks: An Attractive Financial Transaction with Strong Strategic Benefits 1. Combined 2013 revenues expected to exceed $100M 2. Immediately accretive 3. Provides meaningful synergies &+ 4. Improved systems and proprietary technology 5. Significantly increases user base 6. Experienced talent wit
Slide 18: Compelling Financial Returns
Compelling Financial Returns Creating significant value to Perion shareholders • Deal basically pays for itself ‐ First payment at closing of $10M in cash and 1.99 million shares ‐ $15M in future payments financed by cash flow from operations ‐ Expected future revenues from existing SweetPacks custo
Slide 19: SweetPacks Financial Performance
SweetPacks Financial Performance 30,000 10,000 Revenue CAGR 61% 24,000 Adjusted EBITDA CAGR 103% 8,000 In $ thousands 18,000 6,000 12,000 4,000 6,000 2,000 0 0 2009 2010 2011 TTM 9/30/12 Revenue Adjusted EBITDA 2011 Revenue = $15.7M 2011 Adjusted EBITDA = $4.5M TTM 9/30/12 Revenue = $29.7M TTM 9/30/
Slide 20: Financial Overview
Financial Overview Qrion
Slide 21: Financial Highlights (Non-GAAP)
Financial Highlights (Non-GAAP) Q3’12 compared to Q3’11: Very Strong Record of Consecutive Growth: • Revenue $16.3M, + 81% $18 Quarterly Revenue (in $ M) • EBITDA $3.8M versus $2.2M, +71% $16 • Net income $2.6M versus $1.8M, +44% $14 − Despite customer acquisition costs: $5.8M $12 • Cash & deposits:
Slide 22: Combined Trailing Twelve Month (TTM) Pro-Forma P&L Snapshot
Combined Trailing Twelve Month (TTM) Pro-Forma P&L Snapshot (1) (2) In thousand US$ Perion SweetPacks Combined Revenue 51,111 29,814 80,925 1. Revenues do not reflect anticipated Gross Profit 47,434 29,649 77,083 significant organic Gross Profit margin 93% 99% 95% growth in 2013 Operating profit 9,5
Slide 23: Balance Sheet Highlights
Balance Sheet Highlights Stock Price as of 11/30/2012 $9.88 Shares Outstanding post closing 12.03M Equity Capitalization post closing $ 118.9M Perion cash as of 9/30 + SweetPacks cash at closing $19.1M Cash used for acquisition ($10.0M) Total Cash $9.1M Short-term debt & SweetPacks guaranteed future
Slide 24: Attractive Valuation Relative to Peers
Attractive Valuation Relative to Peers 2013 Growth (post acquisition) Not Factored Into Price Price as of November 30, 2012 Trailing Twelve Months TTM Multiple Mkt Cap EV Net EV / EV / Ticker Price Revenue EBITDA P/E ($ M) ($ M) Income Revenue EBITDA PERI 9.9 119 127 81 19 14 1.6 6.5 8.6 Average 20.
Slide 25: Summary: Strong Growth and Profits
Summary: Strong Growth and Profits 100 Company will exceed 2012 guidance $100+ 2013 revenues to exceed $100M 80 Combined TTM EBITDA In $ millions margin of 24% 60 $55 + 40 $37 $27 $29 20 0 2009 2010 2011 2012 2013 25
Slide 26: Thank you!
Thank you!
Slide 27: GAAP Reconciliation
GAAP Reconciliation RECONCILIATION OF GAAP TO NON-GAAP RESULTS for Perion Network Ltd., based on the company’s financial statements. U.S. dollars and number of shares in thousands (except per share data). 27