Perion Network reported today that its Outmax AI agent technology grew spend by 316% year-over-year in the first quarter of 2026, as the company posted $90.4 million in total revenue and maintained its full-year financial guidance despite advertiser caution linked to inflation and geopolitical uncertainty.

Perion Network Ltd. (NASDAQ and TASE: PERI) today reported financial results for the three months ended March 31, 2026. The figures show a company navigating a deliberate pivot away from legacy web advertising toward connected television, digital out-of-home, and an AI-driven campaign execution layer branded as Outmax - all while absorbing the continued margin compression from exiting high-value Microsoft search agreements.

Total revenue for the quarter came in at $90.4 million, up 1% year-over-year from $89.3 million in the first quarter of 2025, according to Perion. The headline growth rate is modest, but the composition tells a different story. Advertising Solutions revenue - which encompasses CTV, DOOH, retail media, and web channels - declined 4% year-over-year to $66.7 million, accounting for 74% of total revenue. Search Advertising revenue rose 21% to $23.7 million, representing the remaining 26%.

The Outmax architecture and its TikTok expansion

The most closely watched metric in today's release is the performance of Outmax, Perion's proprietary AI execution agent. On a proforma basis, spend routed through Outmax grew 316% year-over-year. The TikTok integration - announced during the quarter - generated more than $1 million in spend alone within its first weeks of operation, according to Perion's investor presentation.

What makes Outmax structurally distinct from the AI optimization tools built natively into platforms such as Google, Meta, or Amazon is its cross-platform architecture. As Tal Jacobson, Perion's CEO, explained during the earnings call: "We're the only technology out there that can perform this across both CTV, web and social with closed gardens, which is a major advantage to have only 1 AI agent technology and infrastructure that can run across all those channels, all those platforms."

The TikTok integration extends Outmax into a platform with 1.6 billion users, according to Perion. The company's investor materials note that TikTok's global advertising revenue is projected to exceed $50 billion by 2027. Perion reports that early TikTok results are already showing up to a 25% performance lift compared with standard platform optimization defaults - a distinction the company frames as applying algorithmic intelligence beyond TikTok's native defaults, optimizing toward brand-defined business outcomes rather than platform-standard KPIs.

This matters to the marketing community because the trend toward agentic advertising infrastructure is accelerating. Perion's 2025 annual report, filed with the SEC on March 16, 2026, provided the first audited, SEC-filed financial record of what Outmax looks like in practice, including a CTV campaign where cost per action fell from $4.61 to $0.53 over four weeks. The Q1 2026 results build on that foundation.

CTV, DOOH, and retail media growth rates

The three channels Perion designates as growth engines all posted substantial spend increases. CTV spend rose 68% year-over-year to $18.0 million, up from $10.7 million in Q1 2025. DOOH spend grew 29% to $60.6 million, up from $47.2 million. Retail media spend increased 27% to $36.5 million, up from $28.7 million - though Perion's CFO Elad Tzubery noted some softness in the consumer packaged goods vertical.

These growth rates outpace the broader programmatic market. PPC Land has tracked the acceleration of programmatic DOOH infrastructure throughout 2025 and into 2026, with supply-side platforms racing to connect buyers to fragmented inventory across retail, transit, and place-based environments. The broader DOOH category is forecast to expand 14.5% in 2026, making Perion's 29% spend growth in that segment a meaningful outperformance. Perion's DOOH position was built partly through the 2023 acquisition of Hivestack for $100 million, which gave the company a programmatic supply-side platform for outdoor digital inventory.

The overall Perion One platform - the unified layer across all of these channels - saw spend increase 6% year-over-year. The contribution ex-TAC from Perion One rose 7% year-over-year and reached 81% of total contribution ex-TAC, up from 75% in the first quarter of 2025. Tzubery said the company expects Perion One's share of contribution ex-TAC to reach 85% to 90% for the full year 2026.

The search margin problem

Search revenue growing 21% year-over-year sounds positive in isolation. The contribution ex-TAC picture is harder. Tzubery was direct on the call: as Perion transitions away from the Microsoft agreement toward alternative search providers, the margin profile of that activity is shrinking. Search contribution ex-TAC declined 70% year-over-year as a consequence - a drop that was, according to management, fully anticipated in the annual guidance model.

Perion's Q2 2024 results showed the initial impact of Microsoft Bing's changes on revenue, which fell 39% that quarter. The Q1 2026 picture represents a later stage of the same transition: nominal revenue recovery in search, but structural margin erosion as lower-margin alternative providers replace the prior Microsoft arrangement. For media buyers and agencies, the practical takeaway is that Perion is actively deprioritizing search as a business line. The company said it will no longer provide channel-level revenue breakdowns as a primary KPI, shifting instead to spend and contribution ex-TAC as the leading performance indicators.

Financial structure and cash position

Below the revenue line, the quarter's financial profile reflects both investment and currency headwind. Contribution ex-TAC - the metric that strips out traffic acquisition costs and media buy, leaving only the revenue the company retains - came in at $39.7 million, flat year-over-year, with a 44% margin consistent with Q1 2025.

Adjusted EBITDA was $0.5 million, compared with $1.8 million in the first quarter of 2025 - a 75% decline. The primary drivers, according to Tzubery, were incremental costs from the Green Bits acquisition completed in Q2 2025 and additional go-to-market investment to support the company's three-year growth plan. A foreign exchange headwind of $1.4 million, tied to U.S. dollar weakness, also weighed on the result. Excluding that FX impact, adjusted EBITDA would have been $1.9 million - essentially flat year-over-year despite the additional cost base.

On a GAAP basis, the net loss widened to $10.0 million in Q1 2026 from $8.3 million in Q1 2025. Non-GAAP net income was $4.8 million, or $0.11 per diluted share, compared with $5.4 million, or $0.11 per diluted share, in the prior-year period. The diluted share count used in the non-GAAP calculation shrank from 49.1 million in Q1 2025 to 43.2 million in Q1 2026, reflecting the scale of share repurchases completed over the past year.

Cash flow from operations was $6.7 million in Q1 2026, a significant reversal from the $7.1 million cash outflow recorded in Q1 2025. Adjusted free cash flow was $7.0 million, compared with negative $6.1 million in the prior-year period. Perion ended the quarter with $293.0 million in net cash - comprising cash and cash equivalents, short-term bank deposits, and marketable securities - down from $312.9 million at December 31, 2025, principally because $24.1 million was returned to shareholders through buybacks during the quarter.

Share repurchase program

Share repurchases remain a prominent feature of Perion's capital allocation. During Q1 2026, the company bought back 2.5 million shares for $24.1 million. Cumulatively, under the authorized $200 million repurchase plan, Perion has acquired 15.3 million shares for $142.2 million as of March 31, 2026. Tzubery said on the call that the cumulative average acquisition price is $9.27 per share - below the stock's recent trading range - and characterized the program as generating "immediate tangible value for our shareholders."

The balance sheet structure is worth noting for context. Total assets were $866.2 million at March 31, 2026, down from $913.8 million at December 31, 2025, primarily because of the buyback program reducing shareholders' equity and the runoff in accounts receivable. Goodwill and intangible assets stood at $351.1 million, reflecting the accumulated acquisition base including Hivestack and the Green Bits/Greenbids deal. Total liabilities were $216.6 million.

Africa partnership and geographic expansion

During Q1 2026, Perion announced an exclusive partnership with Mediamark and McSorely Media to distribute the Outmax AI agent and programmatic DOOH technology across Africa. According to Perion's investor materials, the African programmatic advertising market is forecast to reach $6.5 billion by 2029, growing at a 15.3% compound annual growth rate. The partnership pairs Outmax's real-time optimization capabilities with the agency footprint of the two regional partners, covering a market where this combination is described as currently unavailable.

Jacobson framed the commercial logic on the call: "This expands Perion's commercial footprint and creates new revenue channels without adding further expenses to our P&L." The reseller model is positioned as asset-light - distribution cost is absorbed by the partner, and Outmax's standardized setup is designed to allow rapid onboarding. Jacobson indicated on the call that Perion will pursue additional reseller agreements in other markets, describing the Africa partnership as the beginning of a broader program.

Customer case studies and platform evidence

Perion's investor presentation included case studies illustrating Outmax performance in different channel contexts.

Bouygues Telecom, a major French telecommunications operator, used Outmax to optimize Meta campaigns. According to Perion, the campaign produced a 34% reduction in FTTH (fiber-to-the-home) acquisition costs and a 51% reduction in campaign carbon intensity through real-time optimization.

C4 Energy, a U.S. energy drinks brand, ran Outmax-managed campaigns on YouTube. The results cited by Perion include a 4.1% lift in brand ad recall, a 20.7% lift in brand awareness, and a skippable view rate 80% above benchmark.

A fourth case study featured Vaseline, which integrated live UV-index data directly into programmatic DOOH creative. The system dynamically updated throughout the day, displaying a color-coded exposure risk indicator. According to Perion's materials, the campaign delivered over 1.65 million impressions.

These case studies speak to a pattern that PPC Land has documented in the context of the broader agentic advertising debate: research published by EMARKETER in partnership with Perion in February 2026 found that 89% of marketers consider creative critical to performance, while 53.2% say creative insights arrive too slowly to act on. The underlying argument is structural - not a shortage of data, but a missing execution layer that converts signals into action across channels in real time.

Macro conditions and sales leadership change

Tzubery flagged several near-term headwinds on the call. Inflation, oil price volatility, and geopolitical uncertainty in the Middle East have contributed to reduced budget confidence among some advertisers, particularly in the CPG and automotive sectors. Short planning cycles - typically three to six months - mean the company has limited forward visibility into the second quarter.

Separately, Jacobson disclosed that Chief Revenue Officer Stephen Yap will be transitioning out of his role as part of a sales leadership realignment. The stated objective is to flatten the organization and improve pipeline-to-revenue conversion, including the introduction of AI-based sales development representative tooling for faster lead qualification. No replacement hire was announced.

Full-year 2026 guidance maintained

Despite the soft adjusted EBITDA in Q1 and the macro uncertainty flagged for Q2, Perion reiterated its full-year 2026 guidance. Contribution ex-TAC is expected to come in between $215 million and $235 million, implying a revenue range of $460 million to $490 million. Adjusted EBITDA is targeted at $50 million to $54 million - a significant step up from the $0.5 million reported in Q1. The guidance midpoint implies an adjusted EBITDA to contribution ex-TAC margin of approximately 23%, up from 22% in full-year 2025.

Tzubery said the confidence behind the maintained guidance rests on two tangible elements: accelerating Outmax adoption particularly in the second half, and several large strategic agreements currently in advanced stages of onboarding that management expects to begin contributing in Q2 and ramp through H2. Perion's business is heavily weighted toward the second half - consistent with the prior year, when Q4 2025 contribution ex-TAC was $65.2 million against Q1 2025's $39.7 million.

Jacobson said on the call that the company is targeting double-digit contribution ex-TAC growth by Q4 2026, aiming toward the 20% rate that anchors the three-year plan announced in early 2026.

Perion's client base spans 52 of the Fortune 100 companies, including 17 of the 19 largest consumer and retail companies, all four of the largest telecommunications companies, five of the six largest pharmaceutical companies, and six of the ten largest technology and media companies, according to the investor presentation.

Timeline

Summary

Who: Perion Network Ltd. (NASDAQ and TASE: PERI), a digital advertising technology company headquartered in Tel Aviv with offices in New York, London, Paris, Toronto, and other major cities.

What: First quarter 2026 financial results showing total revenue of $90.4 million (up 1% year-over-year), Outmax AI agent spend growth of 316% on a proforma basis, CTV spend growth of 68% to $18.0 million, DOOH spend growth of 29% to $60.6 million, retail media spend growth of 27% to $36.5 million, adjusted EBITDA of $0.5 million, cash from operations of $6.7 million, and reiterated full-year guidance of $215-$235 million in contribution ex-TAC and $50-$54 million in adjusted EBITDA. The quarter also included the TikTok launch of Outmax, generating over $1 million in spend, and an exclusive African distribution partnership with Mediamark and McSorely Media.

When: Results cover the three months ended March 31, 2026, announced on May 20, 2026.

Where: The financial results cover global operations. The TikTok expansion extends Outmax into a platform with 1.6 billion users. The Africa partnership targets a programmatic market forecast to reach $6.5 billion by 2029. The company's primary listings are on Nasdaq and the Tel Aviv Stock Exchange.

Why: The results matter for the marketing and advertising technology community because they document, in quarterly financial detail, how a mid-sized ad tech company is repositioning from web-dependent, search-influenced revenue toward AI-driven execution across CTV, DOOH, social, and retail media - channels where programmatic infrastructure is still maturing and where cross-platform optimization tools like Outmax face limited direct competition. The transition also illustrates the structural costs involved: adjusted EBITDA compressed sharply in Q1 while the company invests in go-to-market capacity and absorbs the margin reset from exiting the Microsoft search arrangement. The full-year guidance, maintained despite these pressures, signals management's confidence in a second-half acceleration tied to specific strategic agreements and growing Outmax pipeline adoption.

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