Perion reports mixed Q1 Results, highlighting growth in CTV and Retail Media

Perion reports mixed Q1 Results, highlighting growth in CTV and Retail Media

Perion, a digital advertising technology company, recently released its financial results for the first quarter of 2024. The report paints a mixed picture, showcasing growth in certain areas alongside challenges in others.

Overall Revenue Growth: Perion's total revenue increased by 9% year-over-year (YoY) to $157.8 million in Q1 2024.

Shifting Landscape: Advertising Solutions revenue, however, decreased by 5% YoY, primarily due to a decline in video advertising. This decline was partially offset by significant growth in Connected TV (CTV) advertising (108% YoY) and Retail Media (134% YoY).

Search Advertising Strength: Search Advertising revenue grew by 26% YoY, driven by an increase in both average daily searches (20%) and the number of publishers (8%). However, the company acknowledges recent changes by Microsoft Bing that are expected to negatively impact Search Advertising performance in Q2 and beyond.

Profitability: Perion's profitability metrics also showed a decline. GAAP Net Income decreased by 51% YoY, while Non-GAAP Net Income decreased by 25% YoY. Adjusted EBITDA was down 35% YoY.

Growth areas and opportunities

Perion's strong performance in CTV and Retail Media reflects the growing importance of these advertising channels.

CTV Advertising: CTV advertising is a rapidly growing segment within the digital advertising landscape. According to eMarketer, CTV ad spending is expected to reach $30.1 billion in the US alone by 2024. Perion's significant YoY growth in this area positions them well to capitalize on this trend.

Retail Media: Retail Media allows retailers to leverage their own data and customer insights to deliver targeted advertising campaigns. With the rise of e-commerce, Retail Media is becoming an increasingly valuable tool for brands. Perion's strong growth in this area reflects this trend and positions them as a potential partner for retailers looking to expand their advertising reach.

Challenges and Considerations

Microsoft Bing: Perion acknowledges the recent changes implemented by Microsoft Bing, which are expected to negatively impact their Search Advertising performance. This highlights the dynamic nature of the digital advertising landscape and the need for companies to be adaptable.

Overall, Perion's Q1 2024 results offer a glimpse into the evolving digital advertising landscape. While the company faces challenges in its core Search Advertising business, they are demonstrating growth in high-potential areas like CTV and Retail Media. Perion's ability to adapt and capitalize on these trends will be crucial for their continued success.

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