Shares of Perion Network, Ltd. (NASDAQ:PERI) on the Rise Following Q3 2016 Fiscal Results

Global technology leader in high-quality advertising solutions, Perion Network, Ltd. (NASDAQ:PERI), announces its financial results for Q3, 2016.

TEL AVIV, Israel and NEW YORK, Nov. 08, 2016 (GLOBE NEWSWIRE) — Perion Network Ltd. (PERI), a global technology leader in high-quality advertising solutions for brands and publishers, announced today its financial results for the third quarter and nine months ended September 30, 2016.

Josef Mandelbaum, Perion’s CEO commented, “Perion delivered both sequential and year-over-year EBITDA growth for the first time in two years, reflecting the stability of our business and the continued reduction in expenses, which have enabled us to deliver consistent profitability. This translated into another excellent quarter of cash generation, whereby cash flow from continuing operations was $9.6 million, and for the first nine months of the year now stands at $21.7 million.”

“We have increased profits, despite lower than expected revenues, which were impacted by: the cancellation in September of approximately $3 million in previously booked ad campaigns related to the presidential elections; and proactive actions we took with a couple of download publishers, reducing search-generated revenue by approximately $2 million,” concluded Mr. Mandelbaum. “While we expect some lingering effect to carry over into the fourth quarter, it will be our strongest quarter of the year and we expect revenue and EBITDA to continue to grow sequentially and on a year over year basis. We also expect non-search revenue to be more than 50% of total revenue, in the fourth quarter, for the first time in the past six years.”

Financial Comparison for the Third Quarter of 2016:

Revenues: The 41% year over year increase in revenues is primarily due to the addition of the Undertone business since Q4 2015.  Search-generated revenues declined marginally on a sequential basis, but remain relatively stable, now for the past seven consecutive quarters.

Customer Acquisition and Media Buy Costs (“CAC”): CAC in the third quarter of 2016 were $33.0 million, or 44% of revenues, as compared to $25.3 million, or 48% of revenues in the third quarter of 2015. The increase in the nominal cost compared to the third quarter of 2015 was due to the media buy costs in the Undertone business, acquired in the fourth quarter of 2015.  However, as a percentage of revenues these costs have decreased due to these expenses representing a lower percentage of revenues in our Undertone business.

Net Income (loss): On a GAAP basis, net income in the third quarter of 2016 was $4.9 million, as compared to a net loss of $70.8 million in the third quarter of 2015.  The loss in the third quarter of 2015 was primarily due to a non-cash, $74.1 million impairment of goodwill and intangible assets.

Non-GAAP Net Income: In the third quarter of 2016, Non-GAAP net income was $7.7 million, or 10% of revenues, compared to the $8.3 million, or 16% of revenues, in the third quarter of 2015.

Adjusted EBITDA: In the third quarter of 2016, adjusted EBITDA was $12.4 million, or 17% of revenues, increasing sequentially and year over year, compared to $11.5 million, or 22% of revenues, in the third quarter of 2015.

Cash and Cash Flow from Operations: As of September 30, 2016, cash, cash equivalents and short-term deposits, were $31.4 million. This balance reflects the $22 million cash payment, and the elimination of a $36 million future nominal acquisition obligation previously announced. Cash provided by continuing operations in the third quarter of 2016 was $9.6 million, bringing the total since the beginning of the year to $21.7 million.

Perion currently satisfies all the financial covenants associated with its debt.

Financial Outlook for the Fourth Quarter of 2016:

Management today announced its financial outlook for the fourth quarter of 2016 as follows:

    Revenue is expected to be in the range of $78 – $82 million.

    Adjusted EBITDA is expected to be in the range of $12.5 – $13.5 million.

Conference Call:

Perion will host a conference call to discuss the results today, November 8, 2016, at 10 a.m. ET. Details are as follows:

    Conference ID: 2099863

    Dial-in number from within the United States: 1-888-684-1264

    Dial-in number from Israel: 1-809-258-350

    Dial-in number (other international): 1-913-312-0850

    Playback available until November 15, 2016 by calling 1-877-870-5176 (United States) or 1-858-384-5517 (international). Please use PIN code 2099863 for the replay.

    Link to the live webcast accessible at http://www.perion.com/ir-events

About Perion Network Ltd.

Perion is a global technology company that delivers high-quality advertising solutions to brands and publishers.  Perion is committed to providing outstanding execution, from high-impact ad formats to branded search and a unified social and mobile programmatic platform. More information about Perion may be found at www.perion.com, and follow Perion on Twitter@perionnetwork.

Original Source

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Perion Network, Ltd. (NASDAQ:PERI) are trading +14.29% on the news and in the range of $1.06 – 1.17 during the current trading session.  When taking a look at which direction the stock might be headed, investors often look to brokerage analysts who cover the stock.  Sell-side research firms on Wall Street currently have a consensus one-year price target of $3.50 on the stock.  This is according to brokerage analysts polled by Thomson Reuters First Call.

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Sell-side analysts are projecting earnings per share of $0.11 for the next fiscal quarter.  For the current year, analysts are predicting earnings of $0.38 per share according to First Call.

In looking at where the stock is trading on a technical level, the stock is trading -1.90% away from its 50-day moving average of $1.14.  Based on the most recent available data, the equity is -71.57% off of its 52-week high of $3.94 and +19.15% away from its 52-week low which is $0.94.

This is a crucial indicator investors watch as higher ratios compared to peers, would suggest higher future earnings growth potential for the stock.  The price to current year EPS estimates from research analysts currently stands at 2.95.  In looking further ahead, potential investors should note that the company’s price to next year’s EPS estimates is $2.87.

Today, the stock opened at $1.10 and the last bid at the time of writing stood at $1.12.  During the session thus far, the equity dipped down to $1.06 and touched $1.17 as the high point.  Perion Network, Ltd. (NASDAQ:PERI) has a market cap of $85.49M and has seen an average daily volume of 168,995 over the past three months.

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Disclaimer: Nothing contained in this publication is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.

 

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