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Perion (NASDAQ:PERI) is a rather small (market cap of around $1 billion) demand-side ad tech platform that mainly focuses on two advertising spaces: “Search,” through Microsoft Bing, and “Display,” through, among others, Connected TV.
In 2021, more than half of the revenue was generated through Bing while the other half was generated in the Display division. By year-end, however, the “display” division had outgrown (also fueled by acquisitions) the “search” division.
Perion Q4 earnings
Perion's focus on both divisions has shaped over time as CEO Doron Gerstel has divested unprofitable activities and invested in these fast-growing segments. As shareholders started to see the results of this turnaround in 2021 in the form of strong revenue and earnings growth, share price multiplied threefold.
Data by YCharts
Perion's strong focus on only these two divisions improves prediction confidence. Let's examine what we can expect from Perion in 2022, in order to be one step ahead of management's updated guidance tomorrow morning.
Indeed, on April 4, management indicated that it will review its guidance on the 28th of April. Since, the stock has declined by 15%. Clearly, investors are not expecting any raise in guidance. Since, Alphabet (GOOG) (GOOGL) and Microsoft (MSFT) have published their earnings, providing indications of the CTV and Search ad markets. Let's have a look.
Q1 of Perion will be very strong
On the 4th of April, Perion provided investors with a concise trading update: Over the first three months of 2022, revenue increased by +39%, while aEBITDA increased by +150%.
Perion Q1
Strong numbers, although revenue's Q-o-Q decline of -21% is not that much better than the -24% Q-o-Q decline in Q1 2021. Perion has thus “lapped” its revenue growth, indicating that – in the case of Perion – there has been no slowdown in ad demand as of yet.
Current full year guidance
Current guidance dates from the 10th of February, 2022.
Perion Q4…