Perion Reports Fourth Quarter Results

NEW YORK & TEL AVIV, Israel--( BUSINESS WIRE)-- 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 fourth quarter and full year ended December 31, 2025.

“Our fourth-quarter performance, highlighted by a 19% year-over-year increase in Contribution ex-TAC and a 53% surge in Adjusted EBITDA, demonstrates that Perion One is winning,” said Tal Jacobson, CEO of Perion. “In 2025, we shifted our strategy to become the centralized platform for advertisers, integrating our technologies, establishing strategic partnerships, and crossing the inflection point in the company’s growth trajectory.”

“AI is our structural advantage. By transforming the Perion One Platform into an AI-native execution infrastructure, we will allow marketers to harness the power of AI Agents to control and optimize their marketing activities,” Mr. Jacobson continued. “Outmax, our proprietary AI execution agent, drives systematic expansion of spend within existing customers across channels, geographies, and verticals. We believe that transforming Perion into the infrastructure where Agents can interact with Agents and work on their own to optimize for their brands is the future, and Perion is the backbone of this future.”

“Our execution-led growth gives us confidence in the Perion 2028 target plan” Mr. Jacobson concluded. “It defines a clear path to durable, organic growth, where Perion One represents the vast majority of our business, with legacy activities remaining stable but no longer defining our future.”

Fourth Quarter Highlights

FY 2025 Highlights

Fourth Quarter 2025 Financial Highlights 2

In millions,

except per share data

Three months ended

Year ended

December 31,

2025

2024

2025

2024

Advertising Solutions Revenue

111.0

104.1

348.9

335.6

Search Advertising Revenue

26.2

25.5

91.0

162.7

(44%)

Total Revenue

137.1

129.6

439.9

498.3

(12%)

Contribution ex-TAC (Revenue ex-TAC)

65.2

54.7

19%

203.4

212.3

(4%)

GAAP Net Income (loss)

8.0

4.9

61%

(7.9)

12.6

Non-GAAP Net Income

21.4

16.5

30%

51.3

64.4

(20%)

Adjusted EBITDA

24.3

15.8

53%

45.2

51.2

(12%)

Adjusted EBITDA to Contribution ex-TAC

37%

29%

22%

24%

Net Cash from Operations

21.8

4.3

403%

41.9

6.9

504%

Adjusted Free Cash Flow

20.7

4.3

380%

40.2

16.6

142%

GAAP Diluted EPS

0.19

0.11

73%

(0.19)

0.25

Non-GAAP Diluted EPS

0.49

0.33

48%

1.13

1.27

(11%)

1 Retail Media revenue includes several media channels, such as CTV, DOOH and others

2 Contribution 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.

Financial Outlook 3

Full Year 2026 Guidance reflects planned acceleration of Perion One adoption and increased investment in innovation and go-to-market.

Perion 2028 Target Plan

Introducing long-term targets aiming to provide visibility into the Company's transformed profile. These targets assume organic growth and exclude a potential impact from future M&A:

3 A reconciliation between results on a GAAP and non-GAAP basis for Contribution ex.-TAC is provided in the last table of this press release. 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.

Share Repurchase

The Company maintains its existing share repurchase program with a total authorization of $200 million.

Revenue and Trends by channel 4

Channels

Q4 2025

Revenue ($M)

% of Revenue

YoY Change

DOOH

35.8

26%

28%

CTV

25.1

18%

59%

Web

49.9

36%

(17%)

26.2

19%

Other

0.2

(64%)

4 Numbers may not add up due to rounding

Financial Comparison for the Fourth Quarter of 2025

Revenue: Revenue increased by 6% to $137.1 million in the fourth quarter of 2025 from $129.6 million in the fourth quarter of 2024. Advertising Solutions revenue increased 7% year-over-year, accounting for 81% of revenue, primarily due to a 59% increase in our CTV channel and a 28% increase in Digital Out of Home revenue, partially offset by 17% decline in Web revenue. Search Advertising revenue increased by 3% year-over-year, accounting for 19% of revenue.

Traffic Acquisition Costs and Media Buy (“TAC”): TAC amounted to $71.9 million, or 52% of revenue, in the fourth quarter of 2025, compared with $74.8 million, or 58% of revenue, in the fourth quarter of 2024.

GAAP Net Income: GAAP net income increased by 61% to $8.0 million in the fourth quarter of 2025, compared with $4.9 million in the fourth quarter of 2024.

Non-GAAP Net Income: Non-GAAP net income was $21.4 million, or 16% of revenue, in the fourth quarter of 2025, compared with $16.5 million, or 13% of revenue, in the fourth quarter of 2024. A reconciliation of GAAP to non-GAAP net income is included in this press release.

Adjusted EBITDA: Adjusted EBITDA was $24.3 million, or 18% of revenue and 37% of Contribution ex-TAC in the fourth quarter of 2025, compared with $15.8 million, or 12% of revenue and 29% of Contribution ex-TAC in the fourth quarter of 2024. 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 fourth quarter of 2025 was $21.8 million, compared with $4.3 million in the fourth quarter of 2024.

Net cash: As of December 31, 2025, cash and cash equivalents, short-term bank deposits and marketable securities, amounted to $312.9 million, compared with $373.3 million as of December 31, 2024.

Financial Comparison for the Full Year of 2025

Revenue: Revenue decreased by 12% to $439.9 million in 2025 from $498.3 million in 2024. Advertising Solutions revenue increased 4% year-over-year, accounting for 79% of revenue, primarily due to a 42% increase in our CTV channel and a 36% increase in Digital Out of Home revenue, partially offset by a 13% decline in Web revenue. Search Advertising revenue decreased by 44% year-over-year, accounting for 21% of revenue, following the previously announced changes implemented by Microsoft Bing in 2024.

Traffic Acquisition Costs and Media Buy (“TAC”): TAC amounted to $236.5 million, or 54% of revenue, in 2025, compared with $286.0 million, or 57% of revenue, in 2024.

GAAP Net Income (Loss): GAAP net loss was $7.9 million in 2025, compared with GAAP net income of $12.6 million in 2024.

Non-GAAP Net Income: Non-GAAP net income was $51.3 million, or 12% of revenue, in 2025, compared with $64.4 million, or 13% of revenue, in 2024. A reconciliation of GAAP to non-GAAP net income is included in this press release.

Adjusted EBITDA: Adjusted EBITDA was $45.2 million, or 10% of revenue and 22% of Contribution ex-TAC in 2025, compared with $51.2 million, or 10% of revenue and 24% of Contribution ex-TAC in 2024. 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 2025 was $41.9 million, compared with $6.9 million in 2024.

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-q4-and-fy-2025-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 is an advanced technology leader redefining advertising through AI-native infrastructure, delivering real-time media execution across CTV, digital out-of-home, commerce and retail media, social and digital environments. Powered by Outmax, the company’s proprietary AI engine, Perion helps brands, agencies, and retailers optimize spend and performance, driving measurable outcomes at scale.

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 and Adjusted free cash flow.

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 income (loss) from operations excluding stock-based compensation expenses, restructuring costs and other charges, unusual legal costs, depreciation, amortization of acquired intangible assets, retention and other acquisition-related expenses, as well as gains and losses recognized with respect to changes in fair value of contingent consideration.

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 net income (loss) and net earnings (loss) per share excluding stock-based compensation expenses, restructuring costs and other charges, unusual legal costs, retention and other acquisition-related expenses, amortization of acquired intangible assets and the related taxes thereon, foreign exchange gains and losses associated with ASC-842, revaluation of acquisition related contingent consideration as well as gains and losses recognized with respect to changes in fair value of contingent consideration.

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, 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), loss of key customers or of other partners that are material to our business, 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 25, 2025, 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

Year ended

December 31,

2025

2024

2025

2024

(Unaudited)

(Audited)

Revenue

Advertising Solutions

110,982

104,101

348,930

335,550

Search Advertising

26,161

25,476

90,997

162,736

Total Revenue

137,143

129,577

439,927

498,286

Costs and Expenses

Cost of revenue

12,617

12,334

51,800

46,643

Traffic acquisition costs and media buy

71,945

74,838

236,484

285,962

Research and development

8,675

8,461

34,653

36,655

Selling and marketing

19,461

16,502

76,491

68,497

General and administrative

9,052

9,742

36,402

38,697

Change in fair value of contingent consideration

1,541

Depreciation and amortization

4,972

3,524

17,677

16,434

Restructuring costs and other charges

1,322

6,895

Total Costs and Expenses

126,722

125,401

454,829

501,324

Income (loss) from Operations

10,421

4,176

(14,902)

(3,038)

Financial income, net

571

1,932

9,928

18,520

Income (loss) before Taxes on income

10,992

6,108

(4,974)

15,482

Taxes on income

3,029

1,167

2,959

2,868

Net Income (loss)

7,963

4,941

(7,933)

12,614

Net Earnings (loss) per Share

Basic

0.20

0.11

(0.19)

0.27

Diluted

0.19

0.11

(0.19)

0.25

Weighted average number of shares

Basic

40,072,876

45,215,999

42,098,471

47,281,588

Diluted

41,632,828

46,325,857

42,098,471

49,555,777

PERION NETWORK LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

In thousands

December 31,

2025

2024

(Unaudited)

(Audited)

ASSETS

Current Assets

Cash and cash equivalents

89,997

156,228

Restricted cash

1,176

1,134

Short-term bank deposits

151,030

139,333

Marketable securities

71,877

77,774

Accounts receivable, net

187,871

164,358

Prepaid expenses and other current assets

17,830

22,638

Total Current Assets

519,781

561,465

Long-Term Assets

Property and equipment, net

11,685

8,916

Operating lease right-of-use assets

17,171

20,209

Goodwill and intangible assets, net

355,235

316,003

Deferred taxes

9,266

8,517

Other assets

620

416

Total Long-Term Assets

393,977

354,061

Total Assets

913,758

915,526

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities

Accounts payable

129,882

122,005

Accrued expenses and other liabilities

37,821

32,848

Short-term operating lease liability

2,324

3,648

Deferred revenue

1,206

2,049

Short-term payment obligation related to acquisitions

17,348

1,300

Total Current Liabilities

188,581

161,850

Long-Term Liabilities

Payment obligation related to acquisition

10,383

Long-term operating lease liability

20,034

18,654

Deferred taxes

7,397

Other long-term liabilities

11,357

12,082

Total Long-Term Liabilities

49,171

30,736

Total Liabilities

237,752

192,586

Shareholders' equity

Ordinary shares

341

391

Additional paid-in capital

487,716

527,149

Treasury shares at cost

(1,002)

Accumulated other comprehensive gain (loss)

267

(215)

Retained earnings

188,684

196,617

Total Shareholders' Equity

676,006

722,940

Total Liabilities and Shareholders' Equity

913,758

915,526

PERION NETWORK LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

In thousands

Three months ended

Year ended

December 31,

2025

2024

2025

2024

(Unaudited)

(Audited)

Cash flows from operating activities

Net Income (loss)

7,963

4,941

(7,933)

12,614

Adjustments required to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

4,972

3,524

17,677

16,434

Stock-based compensation expense

5,862

9,886

31,117

27,211

Foreign currency translation

(402)

(481)

Accrued interest, net

1,235

(514)

2,121

3,355

Deferred taxes, net

(10,323)

(408)

(1,527)

(2,109)

Accrued severance pay, net

(177)

591

(1,033)

295

Restructuring costs and other charges

1,322

6,895

Gain from sale of property and equipment

(3)

(9)

(42)

(46)

Net changes in operating assets and liabilities

12,674

(13,731)

706

(57,763)

Net cash provided by operating activities

21,801

4,338

41,927

6,939

Cash flows from investing activities

Purchases of property and equipment, net of sales

(333)

(1,359)

(3,758)

(6,826)

Capitalized software development costs

(744)

(1,942)

Investment in marketable securities, net of sales

(12,285)

2,132

6,566

1,311

Short-term deposits, net

(19,300)

10,006

(11,697)

68,117

Cash paid in connection with acquisitions, net of cash acquired

(26,566)

Net cash provided by (used in) investing activities

(32,662)

10,779

(37,397)

62,602

Cash flows from financing activities

Proceeds from exercise of stock-based compensation

545

612

547

Payments of contingent consideration

(54,540)

Repurchase of shares for retirement

(23,935)

(13,389)

(71,212)

(46,920)

Repayment of long-term loans

(452)

Net cash used in financing activities

(23,390)

(13,307)

(71,052)

(100,913)

Effect of exchange rate changes on cash and cash equivalents and restricted cash

(129)

(302)

333

(214)

Net increase (decrease) in cash and cash equivalents and restricted cash

(34,380)

1,508

(66,189)

(31,586)

Cash and cash equivalents and restricted cash at beginning of period

125,553

155,854

157,362

188,948

Cash and cash equivalents and restricted cash at end of period

91,173

157,362

91,173

157,362

PERION NETWORK LTD. AND ITS SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

In thousands

Three months ended

Year ended

December 31,

2025

2024

2025

2024

(Unaudited)

Revenue

137,143

129,577

439,927

498,286

Traffic acquisition costs and media buy

71,945

74,838

236,484

285,962

Contribution ex-TAC

65,198

54,739

203,443

212,324

Three months ended

Year ended

December 31,

2025

2024

2025

2024

(Unaudited)

GAAP Income (loss) from Operations

10,421

4,176

(14,902)

(3,038)

Stock-based compensation expenses

5,862

9,886

31,117

27,211

Retention and other acquisition related expenses

2,908

(1,896)

9,110

2,040

Unusual legal costs

107

140

882

140

Change in fair value of contingent consideration

1,541

Amortization of acquired intangible assets

4,311

3,010

15,252

14,364

Restructuring costs and other charges

1,322

6,895

Depreciation

661

514

2,425

2,070

Adjusted EBITDA

24,270

15,830

45,206

51,223

PERION NETWORK LTD. AND ITS SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

In thousands (except share and per share data)

Three months ended

Year ended

December 31,

2025

2024

2025

2024

(Unaudited)

GAAP Net Income (loss)

7,963

4,941

(7,933)

12,614

Stock-based compensation expenses

5,862

9,886

31,117

27,211

Amortization of acquired intangible assets

4,311

3,010

15,252

14,364

Retention and other acquisition related expenses

2,908

(1,896)

9,110

2,040

Unusual legal costs

107

140

882

140

Change in fair value of contingent consideration

1,541

Restructuring costs and other charges

1,322

6,895

Foreign exchange losses associated with ASC-842

693

316

2,651

405

Revaluation of acquisition related contingent consideration

227

587

Taxes on the above items

(645)

112

(1,703)

(857)

Non-GAAP Net Income

21,426

16,509

51,285

64,353

Non-GAAP diluted earnings per share

0.49

0.33

1.13

1.27

Shares used in computing non-GAAP diluted earnings per share

43,994,112

49,458,861

45,252,181

50,576,619

PERION NETWORK LTD. AND ITS SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

In thousands

Three months ended

Year ended

December 31,

2025

2024

2025

2024

(Unaudited)

Net cash provided by operating activities

21,801

4,338

41,927

6,939

Purchases of property and equipment, net of sales

(333)

(1,359)

(3,758)

(6,826)

Capitalized software development costs

(744)

(1,942)

Free cash flow

20,724

2,979

36,227

113

Purchase of property and equipment related to our new corporate headquarter office

1,342

2,625

5,665

Portion of the cash payment of contingent consideration in excess of the acquisition date fair value

10,824

Retention payment related to acquisitions

1,300 5

Adjusted free cash flow

20,724

4,321

40,152

16,602

5 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.

PERION NETWORK LTD. AND ITS SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FULL YEAR 2026 GUIDANCE

In thousands

Low

High

Revenue

460,000

490,000

Traffic acquisition costs and media buy

245,000

255,000

Contribution ex-TAC

215 ,000

235,000