Perion Network (PERI) Q2 FY26 earnings call: guidance and Q&A

How do AuthMax and Perion One synergize, and how do agentic tools make complex advertising workflows more portable?

AuthMax is growing rapidly and is fully integrated with Perion One, driving AI technologies within the platform and providing answers and budget reallocation suggestions within Ask Perion. This integration helps optimize complex campaigns and drive better business outcomes.

“AuthMax is now pushing out of CTV, retail and social and outlook is becoming an integrated part of billion, it actually drives a lot of the AI technologies within the platform.”

asked by Andrew Marok · answered by Elad Tzubery

Are the company's medium-term goals still on track given the 2026 performance so far, and what is the path to achieve them?

Management confirmed they are on track for medium-term goals. The onboarding of strategic agreements, continued momentum in growth engines, and efficiency measures provide clear visibility for the second half of the year.

“we are starting right now to onboard some static agreement we discussed about in Q1. There recently some we're seeing right now onboarding into our pipeline. And we see all of our growth engines are continued to generate healthy pipeline as we're looking at Q3 and Q4”

asked by Andrew Marok · answered by Tal Jacobson

What was Perion One's revenue? Will segment disclosure change to revenue ex TAC? Details on headcount reduction? How will the $268 million cash be allocated (buybacks vs. M&A)?

Perion One revenue for Q2 was $74.2 million. The company prefers spend as a key adoption indicator. Headcount reduction was roughly 10% of the cost base, aimed at efficiency and future investment. Cash will be used for remaining buybacks ($33.2M by year-end) and disciplined M&A opportunities, balancing shareholder value.

“The revenue for Q2 for period 1 was $74.2 million. ... Roughly, I can tell you that reduced roughly 10% of the cost base, it was intentionally made us to support the different fluctuation in the assets, but also to give us some room to invest more in when we are going into 2027.”

asked by Jason Helfstein · answered by Elad Tzubery

What factors influence the pacing of contributions from recently signed strategic agreements, and what are the implications for expectations?

Onboarding and testing phases for large strategic agreements took significant time, with material financial contribution expected towards the end of Q3 and accelerating into Q4. The high barrier to entry for these agreements, despite the frustrating process, gives confidence in the technology's value and future growth.

“it took us a lot of time to do the onboarding and all of the testing phases. And the entire H1, we're focusing about showcased the current 1 capabilities and why we can drive better results for them and for their customers. Right now, we just signed them. I think it will take a bit more time to do the onboarding sale and tenable, those contracts will be more materialized towards the end of Q3 and obviously, towards Q4”

asked by Matthew Weber · answered by Elad Tzubery

Can you elaborate on the promotional activity impacting Perion One, and how will take rates normalize over time?

H1 involved test campaigns with low margins, which temporarily impacted take rates. As strategic agreements close, these rates are expected to normalize. Management views testing budgets as a tool to gain market share, and anticipates a modest increase in take rates during the second half of the year.

“So as we said, during H1, we ran a lot of test campaigns. These campaigns come with very low margins as they remain suggest it's tests. But now, again, as we close those strategic agreements. Obviously, they're not going to stay at testing rates, so that should be normalized.”

asked by Jason Kreyer · answered by Tal Jacobson

How do the impressive growth rates in CTV, out-of-home, and retail media reconcile with the declining consolidated Contribution ex TAC, and when will growth rates align?

The decline in consolidated Contribution ex TAC is primarily driven by the open web segment, as budgets shift towards Perion One's solutions. Spend is considered the best indicator of customer adoption. While Perion One's overall take rate is healthy, a moderate increase is expected in H2, but full alignment with growth engine rates is not expected due to varying channel dynamics.

“The entire industry is we see budgets are shifting away from the open wild and moving towards tattoo and second our solutions of the intercom very much focusing most of them around server, which increasing the take from what we what so in the end.”

asked by Jason Kreyer · answered by Elad Tzubery

Are repeat customers using AuthMax showing larger spend on subsequent campaigns?

Yes, AuthMax is a strong 'land and expand' product. The majority of clients start with small budgets and increase their spend quarter-over-quarter within the same account, as AuthMax's outcome-driven nature demonstrates actual business results.

“I think the interesting thing about AuthMax, specifically, it's a great product for the land and expand model, the majority of our clients that are using it start from small budgets and now they're growing quarter-over-quarter within the same account.”

asked by Eric Martinuzzi · answered by Tal Jacobson

Was the lowered midpoint for full-year Contribution ex TAC due to slower-than-expected ramping of the two large strategic accounts?

Yes, the initial expectation was for earlier signing and growth from these agreements. This, combined with macro headwinds, led to the adjustment in the Contribution ex TAC guidance.

“I think that, first of all, it's we -- our initial expectation was that this onboarding in those agreements will be signed earlier in the year. and we will be able to see more growth out there. But also factoring all of the macro headwinds that we saw in we had better visibility to see where we are.”

asked by Eric Martinuzzi · answered by Tal Jacobson