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Perion Reports Second Quarter 2015 ResultsPerion Network Ltd. (NASDAQ: PERI), announced today its financial results for the second quarter and six months of 2015. Financial Highlights *
Josef Mandelbaum, Perion's CEO commented, "I am very pleased with our second quarter financial results, as we exceeded our guidance on Revenues, Adjusted EBITDA, and non-GAAP Net Income. More importantly, as previously forecasted, our supply side monetization business has stabilized, and we expect our third quarter revenues to be consistent with second quarter levels, before returning to growth in the fourth quarter." "On the demand side, Growmobile now enables mobile marketers to easily manage their advertising spend, increase conversions and reduce churn, using a single, streamlined platform, either on a self-serve or fully managed basis," continued Mr. Mandelbaum. "We ended the quarter with 165 active advertisers and approximately $35 million of managed ad spend, representing 15% sequential growth." Financial Comparison for the Second Quarter of 2015: Revenues: In the second quarter of 2015, revenues were $48.6 million, reflecting gross revenues of $52.5 million reduced by $3.9 million of customer acquisition costs netted from top-line revenues. The decrease from revenues of $109.5 million in the second quarter of 2014 is primarily a result of the significantly reduced customer acquisition costs. Non-GAAP Costs and Expenses: Excluding CAC, Non-GAAP costs and expenses in the second quarter of 2015 were $16.7 million, or 34% of revenues, compared to $22.1 million, or 20% of revenues, in the second quarter of 2014. Non-GAAP costs and expenses in the second quarter of 2015 excluded a gain from the reversal of acquisition related contingent consideration of $6.6 million, as well as $4.2 million impairment of acquired intangible assets, $1.6 million amortization of acquired intangible assets, $1.8 million of share based compensation expenses and $0.1 million of acquisition related expenses, all of which were included in the GAAP numbers. In the second quarter of 2014, non-GAAP costs and expenses excluded $4.5 million amortization of acquired intangible assets, $3.9 million of share based compensation expenses and $0.5 million of acquisition related expenses. Adjusted EBITDA: In the second quarter of 2015, adjusted EBITDA was $13.1 million, or 27% of revenues, compared to $33.6 million, or 31% of revenues, in the second quarter of 2014. Non-GAAP Net Income: In the second quarter of 2015, Non-GAAP net income was $9.5 million, or 20% of revenues, compared to $27.4 million, or 25% of revenues, in the second quarter of 2014. Financial Comparison for the Six Months Ended June 30, 2015: Revenues: In the first half of 2015, revenues were $100.7 million, reflecting gross revenues of $113.4 million reduced by $12.7 million of customer acquisition costs netted from top-line revenues. The decrease from revenues of $224.4 million in the first half of 2014 is primarily a result of the significantly reduced customer acquisition costs. Non-GAAP Costs and Expenses: Excluding CAC, Non-GAAP costs and expenses in the first half of 2015 were $34.3 million, or 34% of revenues, compared to $46.7 million, or 21% of revenues, in the first half of 2014. Non-GAAP costs and expenses in the first half of 2015 excluded a gain from the reversal of acquisition related contingent consideration of $6.6 million, as well as $4.2 million impairment of acquired intangible assets, $3.1 million amortization of acquired intangible assets, $3.3 million of share based compensation expenses and $0.7 million of acquisition related expenses, all of which were included in the GAAP numbers. In the first half of 2014, non-GAAP costs and expenses excluded $9.0 million amortization of acquired intangible assets, $8.3 million of share based compensation expenses and $3.4 million of acquisition related expenses. Adjusted EBITDA: In the first half of 2015, adjusted EBITDA was $32.7 million, or 32% of revenues, compared to $67.2 million, or 30% of revenues, in the first half of 2014. Non-GAAP Net Income: In the first half of 2015, Non-GAAP net income was $23.9 million, or 24% of revenues, compared to $55.0 million, or 25% of revenues, in the first half of 2014. Cash and Cash Flow from Operations: As of June 30, 2015, cash, cash equivalents and short-term deposits, were $127.9 million, increasing $7.9 million in the second quarter of 2015. Perion currently satisfies all of the financial covenants associated with its convertible bonds. Cash flow from operations in the first half of 2015 was $20.0 million. Financial Outlook for the Third Quarter of 2015: Management today announced its financial outlook for the third quarter of 2015 as follows:
Conference Call: Perion will host a conference call to discuss the results today, August 3, 2015, at 10 a.m. ET. Details are as follows:
About Perion Network Ltd. Perion powers innovation. Perion is a global performance-based media and Internet company, providing online publishers and app developers advanced technology and a variety of intelligent, data-driven solutions to monetize their application or content and expand their reach to larger audiences, based on its own experience as an app developer. Our leading software monetization platform, Perion Codefuel, empowers digital businesses to optimize installs, analyze data and maximize revenue. Our mobile marketing unit, Growmobile, enables app marketers to advertise across the industry's top-performing traffic sources, including Facebook, Twitter (by MMR) and Google, and increase user spend, reduce churn and improve retention through CRM engagement campaigns. The Perion team brings decades of experience, operating and investing in digitally-enabled businesses, and we continue to innovate and create value for the app ecosystem. More information about Perion may be found at www.perion.com. Follow Perion on Twitter @perionnetwork. Non-GAAP measures Non-GAAP financial measures, as well as adjusted EBITDA, consist of GAAP financial measures adjusted to exclude acquisition related expenses, share-based compensation expenses, accretion and gain from the reversal of acquisition related contingent consideration, impairment and amortization of acquired intangible assets and related taxes, as well as certain accounting entries under the business combination accounting rules that require us to recognize a legal performance obligation related to revenue arrangements of an acquired entity based on its fair value at the date of acquisition. Additionally, in September 2014, the Company issued convertible bonds denominated in New Israeli Shekels and at the same time entered into a derivative arrangement (SWAP) that economically exchanges the convertible bonds as if they were denominated in US dollars. The Company excludes from its GAAP financial measures the fair value revaluations of both, the convertible bonds and the related derivative instrument, and by doing so, the non-GAAP measures reflect the Company's results as if the convertible bonds were originally issued and denominated in US dollars, which is the Company's functional currency. 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. A reconciliation between results on a GAAP and non-GAAP basis is provided on page 8. Forward Looking Statements This press release 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 Perion. The words "will", "believe," "expect," "intend," "plan," "should" 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. 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, among others, 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, potential litigation associated with such transactions, and general risks associated with the business of Perion including intense and frequent changes in the markets in which the businesses operate and in general economic and business conditions, loss of key customers, unpredictable sales cycles, competitive pressures, market acceptance of new products, 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. Various other risks and uncertainties may affect Perion and its results of operations, as described in reports filed by the Company with the Securities and Exchange Commission from time to time, including its annual report on Form 20-F for the year ended December 31, 2014 filed with the SEC on April 16, 2015. Perion does not assume any obligation to update these forward-looking statements. Source: Perion Network Ltd.
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