Perion Network (NASDAQ:PERI) used its fourth-quarter and full-year 2025 earnings call to highlight what executives described as a major business reset and the early results of its “Perion One” strategy, positioning the company as an AI-native execution infrastructure for digital advertising.
Management frames 2025 as a strategic reset
Chief Executive Officer Tal Jacobson said 2025 was “a defining year” for Perion, calling it “year one for the new Perion” after changes to the company’s mission, strategy, technology, organizational structure, and executive team. Jacobson said the company spent 2025 building Perion One as a centralized platform for marketers by integrating technologies, expanding strategic partnerships, and introducing innovations intended to drive growth.
Fourth-quarter results show margin expansion and cash generation
Chief Financial Officer Elad Tzubery said fourth-quarter results represented a “turning point,” pointing to growth in Contribution ex-TAC, Adjusted EBITDA, and operating cash flow. For the fourth quarter, Perion reported:
- Revenue: $137.1 million, up 6% year over year
- Contribution ex-TAC: $65.2 million, up 19% year over year
- Adjusted EBITDA: $24.3 million, up 53% year over year
- Operating cash flow: $21.8 million
Tzubery said Adjusted EBITDA implied a margin of 37% of Contribution ex-TAC in the quarter, which he attributed to operating leverage and “disciplined cost management” that helped decouple expenses from revenue growth. He added the company ended 2025 with $313 million in net cash, even after repurchasing nearly $24 million of shares during the fourth quarter.
GAAP net income for the fourth quarter was $8 million, or $0.19 per diluted share. On a non-GAAP basis, net income was $21.4 million, or $0.49 per diluted share.
Full-year 2025 shows growth in key channels amid mix shift
For the full year 2025, Perion reported revenue of $439.9 million and Contribution ex-TAC of $203.4 million. Adjusted EBITDA was $45.2 million, which management said reflected a 22% ex-TAC margin.
Tzubery also emphasized improved cash generation, stating the company generated $41.9 million in cash from operations for 2025, representing a 504% year-over-year increase. Adjusted free cash flow was $40.2 million, up 142%, and the company posted an 89% adjusted free cash flow conversion ratio to Adjusted EBITDA.
Management highlighted performance in Perion’s “growth engines,” which it said were outpacing the market:
- CTV revenue: up 59% in Q4 and up 42% for the full year, reaching $62.1 million
- Digital out-of-home revenue: up 28% in Q4 and up 36% for the full year, reaching $94.9 million
- Retail media revenue: up 42% in Q4 and up 36% for the full year
The company also discussed continued shifts in revenue mix. Advertising Solutions revenue increased 7% year over year in the fourth quarter, while web revenue declined 17% year over year in Q4 and 13% for the full year. Tzubery said that on a pro forma basis—excluding lower-margin activities discontinued in late 2024—web revenue declined 12% in Q4 and 1% for the full year. Search revenue increased 3% year over year in Q4, and management said it expects search to remain stable going forward.
Partnerships, Outmax adoption, and “layer above DSPs” positioning
Jacobson said Perion launched new partnerships during the quarter with Amazon, Walmart, and Mastercard. He said the Amazon partnership combines Amazon audience data and measurement capabilities with Perion’s AI-driven creative technology and premium inventory, while the Walmart Connect integration brings Perion’s AI-powered dynamic creative optimization into Walmart’s first-party audience and sales insights. With Mastercard, Perion said it is integrating aggregated purchase insights across the U.S. and Europe, with an emphasis on strengthening digital out-of-home and CTV execution.
In Q&A, management said the Amazon DSP integration was driven by customer demand to use Perion’s dynamic creative optimization through Amazon’s platform and that the opportunity is “just getting started.” Jacobson also said Perion is not trying to replace DSPs; instead, it aims to be “a layer above all of those DSPs” to optimize cross-channel outcomes based on advertiser goals.
On Outmax adoption, Jacobson said Perion is seeing strong adoption, with advertisers focused on performance outcomes. He said the company is seeing “anything between 40% to almost 80% uplift with some of our advertisers,” adding that adoption typically starts with test budgets and expands as results are demonstrated. Jacobson also said sales cycles have become shorter as advertisers focus less on features and more on outcomes.
Guidance, capital return, and 2028 targets
For full-year 2026, Perion guided to Contribution ex-TAC of $215 million to $235 million and Adjusted EBITDA of $50 million to $54 million. In response to analyst questions about the range, management said it is factoring in gradual decline in search and other legacy activities alongside sharper growth in Perion One, while noting that advertiser planning cycles remain short (three to six months) and visibility early in the year is limited.
Tzubery also said the company expanded its share repurchase authorization to $200 million from $125 million, with $118 million already executed. In the fourth quarter alone, Perion repurchased 2.5 million shares for $23.9 million, and since initiating the program it has repurchased 12.9 million shares.
Looking to 2028, management laid out targets centered on Perion One. Jacobson cited three key KPIs: Perion One performance spend CAGR of at least 25%, Contribution ex-TAC CAGR of at least 20%, and Adjusted EBITDA margins reaching 28% of Contribution ex-TAC. Tzubery said that starting in 2026, Perion One is expected to comprise 85% to 90% of consolidated Contribution ex-TAC, with search becoming a smaller portion of the mix. He attributed the margin goals to continued efficiency efforts, including automation and AI tools in areas such as G&A and cost of revenue, while also planning investments in go-to-market and R&D.
About Perion Network (NASDAQ:PERI)
Perion Network Ltd. (NASDAQ: PERI) is a digital advertising technology company that offers a suite of solutions designed for both brand marketers and performance-driven advertisers. The firm’s platform integrates search monetization, programmatic display, video and connected TV (CTV) advertising to help clients reach and engage audiences across desktop, mobile and television environments. Through proprietary algorithms and AI-driven tools, Perion’s technology optimizes ad placements in real time, aiming to boost campaign efficiency and return on investment for publishers and advertisers alike.
Key offerings include search engine marketing services that cover major platforms such as Google and Bing, native and display advertising solutions under its Undertone brand, as well as social and video ad formats.
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