Perion Network at Oppenheimer Conference: AI-Driven Advertising Focus

On Wednesday, 13 August 2025, Perion Network (NASDAQ:PERI) participated in the Oppenheimer 28th Annual Technology, Internet & Communications Conference, outlining its strategic shift towards an AI-driven platform, Perion One. The company highlighted its competitive positioning and future growth potential, while acknowledging current economic pressures.

Key Takeaways

• Perion One aims to centralize digital advertising investments, enhancing efficiency.
• AI-driven technology is central to optimizing media investments across fragmented channels.
• The company is transitioning from managed services to a self-service platform.
• Perion continues to see value in its search business for cash flow, despite future uncertainties.
• Commitment to stock buybacks, viewing the current stock price as undervalued.

Financial Results

• Search business generates approximately $20 million in cash flow each quarter.
• Gross margins, which peaked at 90% in 2022, are expected to stabilize around 74% in 2023.
• Accelerated stock buybacks align with the cash flow generated this year.

Operational Updates

• Perion One is designed to orchestrate media investments, not replace existing DSPs.
• Targeting advertisers using multiple DSPs, including both large brands and the middle market.
• New COO will streamline managed services through automation and AI.
• CTV growth is expected to surpass 20% annually, outpacing market growth.

Future Outlook

• Transitioning to a platform model with self-service features to improve efficiency.
• Sales strategy will shift towards building relationships and embedding Perion’s platform in organizations.
• Anticipates reduced need for sales personnel as automation increases.

Q&A Highlights

• Search business remains valuable for cash flow, though its long-term role is uncertain.
• Perion is committed to stock buybacks, believing the stock is undervalued.
• The company aims to maintain sufficient cash reserves for continued investment.

For a deeper dive into Perion’s strategic plans and financial outlook, refer to the full transcript below.

Full transcript - Oppenheimer 28th Annual Technology, Internet & Communications Conference:

Jason Alfstein, Head of Internet Research, Oppenheimer: Good morning, everyone, and thank you for joining us for the fireside chat with Perion Network. I’m Jason Alfstein, head of Internet research at Oppenheimer. Very excited to have CEO Tal Jacobsen and chief revenue officer Steven Yap. Gentlemen, thanks for joining me. So the format, fireside, if anyone online has some questions, there’s a box you can put in, and I can ask your question or email me at jason.healthscene@opco.com.

So, gentlemen, thank you for joining. So to start off, for those not familiar and and perhaps because the company has morphed over time, just describe what Perion does and why it’s, you think its offering is unique for clients.

Tal Jacobsen, CEO, Perion Network: Yeah. Absolutely. Thanks for for having us, Jason. So, yeah, as as you said, Perion has been around for, many years. In the past few years, we’ve concentrated mostly on the supply side of advertising.

So we were kind of an SSP, a bit a bit different in the mechanics, but kind of an SSP. In the past two years, we realized that there’s a major shift within our industry, and we wanted to focus mostly on the demand side. So mostly on the people that are actually spending a trillion dollar a year over digital advertising. And we morphed the entire company into becoming a centralized platform for marketers, mainly CMOs, to be able to, you know, to orchestrate those trillion dollars worth of spend of spend in a very fragmented industry. So just making everything smoother using AI through our entire technology.

And, you know, we’re we’re announcing we’re now announcing more and more features. We just announced a new algorithm for performing CTV, which is you know, CTV is one of our biggest, selling products, but we have so many other products like digital out of home and other products. But our main focus is focusing on the CMO, focusing on our client, and we’re shifting in between channels to get them the best outcome.

Jason Alfstein, Head of Internet Research, Oppenheimer: Great. So, Steven, thanks for joining us. So for those of you who don’t know, Steven joined the company. Was it was it late last year?

Steven Yap, Chief Revenue Officer, Perion Network: No. It’s February this year.

Jason Alfstein, Head of Internet Research, Oppenheimer: Like What? February. Early this year. Right. So I guess, tell us, like, what was appealing about you’re a long time ad tech executive at much bigger companies.

What was appealing about joining Perion as chief revenue officer?

Steven Yap, Chief Revenue Officer, Perion Network: Yeah. Well, and and, again, I echo Tal. Thank you for thank you for having me. Yeah. I mean, as you as you know, you know, I’d I’d spent seventeen years at Google.

Right? And and I had, I was blessed with the opportunities to, during that time, take multiple products to market. I I built a few like Google Analytics or or, or the Latam platforms business for Google, some of the different reporting tools, tag manager, things like that. And during that time, you know, what I really started to to understand and and fundamentally, enjoy, right, was, you know, the ability to build and architect solutions for the marketplace. Right?

And then and then get them to scale, obviously, inside a inside a huge place like Google. You know, in my last stint, I I, you know, I was placed in charge of Google marketing platform and and kind of was asked to rebuild that. And after about two years, you know, there’s an opportunity that kinda came across, through a friend of mine, who said he he kinda floated my name. And when you look at Perion, which was the opportunity, there are very few companies, right, in our industry right now that kind of have the position where they kind of approach their business like a start up. They have the cash to kind of back up all of their innovation aspirations, and they’re really just kind of looking to rebuild solutions for kind of the modern marketer.

You know, all of those combines, you know, how often do you get a chance in your career or even your lifetime, quite frankly, to rebuild the company and a public one at that? And so, you know, given the vision of Perion One, for me, it was really just a a no brainer.

Jason Alfstein, Head of Internet Research, Oppenheimer: Got it. So let’s talk about it’s a great segue. Almost thinking of my questions. Let let’s talk about Perion One strategy. Right?

So so Tal, you know, kinda just broadly, like, you know, what is the PerionOne strategy?

Tal Jacobsen, CEO, Perion Network: Yeah. You wanna

Jason Alfstein, Head of Internet Research, Oppenheimer: Or Steve?

Tal Jacobsen, CEO, Perion Network: I’ll buy it from the from a customer Yeah. Standpoint, why would that be

Steven Yap, Chief Revenue Officer, Perion Network: Yeah. So so so the parent one strategy, again, when you when you look across our industry, right, like, one of the things that really stands out is is just how innovative the industry has been, over the course of its inception. You know, that that’s also kind of provided some of its challenges. Right? With with every piece of technology, you know, where every challenge that you have in digital marketing, there is a there’s another piece of technology for it and another one.

And so what we’ve ended up seeing across the industry plane has been, you know, a very siloed, very disconnected approach, in technology. Right? And it makes it for a lot less efficient, much less cost effective than than the industry originally had been for a while. When we look at Perion, we saw the opportunity in Perion, you know, on in this concept called Perion One to actually unify across people, processes, and technologies. Right?

And so, you know, in its simplest form, when you look at where we were, you had multiple technologies, so up to, like, five different sales teams calling on a single person. Right? Now we’ve actually unified that group so you only hit you can you know, you’re only speaking to one, and you’re talking about the entire spectrum of your digital marketing challenges. Around the technology side of it specifically, it’s how do I start to envision when I wanna deliver a digital marketing campaign? How do I do that in the most objective way possible across both technologies and media that allows for the biggest impact, right, that I’m that I’m actually going to have?

And so what Perion One allows us to do is create connective tissues between all of these technologies between the channels and allow the systems to dictate, hey. Based on the performative nature of your KPIs or the goaling that you have set forth, the system can help you actually achieve those goals by being very channel agnostic as well as being kind of media agnostic. So we don’t necessarily care where it runs or how it runs so that it just simply delivers, that impact for you. And so that is kind of what our aspirations and our vision for, you know, the Perion One platform, going forward.

Jason Alfstein, Head of Internet Research, Oppenheimer: And look, I know investors, you know, ad tech can be very confusing. You know, the term DSP is is broad. There’s, know, there’s a managed service, self-service. So, you know and and, like, why why does a customer, let’s say, choose your buy side tools versus, let’s say, you know, like, you know, buy in, trade desk, you know, Asus. There there’s other solutions out there.

Why do they pick the Perion One solution?

Tal Jacobsen, CEO, Perion Network: Right. I think that that’s a great question, and and we’re actually getting that quite often from investors, less so from from our customers. The way we’re building PerionOne is not to replace other DSPs. It’s a way of having a centralized platform to orchestrate your, in media investments versus to replace them. Right?

So think about it this way. The majority of the market is actually closed gardens. Right? So you have Meta, and you have Google, and now you have TikTok, and you have Reddit, and you have Pinterest. We’re not gonna replace their DSPs.

Right? And that’s the majority of the business, the majority of of digital advertising. But we can’t what we can do is saying, you know, let us sit in between you guys. Let us optimize your spend. Let us optimize your creative.

Let’s let us optimize your data. And with that, because we’re sitting in between that and it’s a centralized platform, we can actually tell you what works best. So maybe for Meta, a specific creative would work better for them, on TikTok or on YouTube, a different creative. Right? But because it’s in one place, you can now actually compare them.

Now we do get some customers that are saying, listen. You guys are great, but I do love to work with the trade disc. And we think the trade discs are great. We’re not trying to replace them. But we do have a feature called Sidekick, which we would tell our customers, listen.

You can do a lot of things over our platform. But if you want to use this trade disc, and and that’s totally fine, you know, just click on a button, and that will push it towards the trade disc. Now we do get our fees from, you know, data or planning or anything else, but we’re not trying to replace the trade desk. We’re not trying to replace Google or Meta. We’re just trying to make a sense out of the whole mess of what digital advertising has become.

Yeah.

Jason Alfstein, Head of Internet Research, Oppenheimer: So so does that mean, like, you’re targeting a specific size advertiser that, you know, let’s say the largest you know, is it the largest advertisers maybe can kind of either figure this out on their own, or maybe they get kind of a bespoke level service from, like, a trade desk or Google Amazon, whereas, like, a medium size or smaller advertisers not getting that. And, you know, so maybe talk about what you’re, you know, why was it maybe the average spend per advertiser today or, like, what’s the sweet spot?

Tal Jacobsen, CEO, Perion Network: Yeah. So we we haven’t broken down it down in our data yet. But what I can tell you is our sweet spot would be advertisers that are using at least two or more DSPs. Right? So maybe customers that are spending money with YouTube and Meta.

Smaller companies that are that tend to push all their budgets towards one platform don’t actually have that issue. Right? They have one platform. They don’t need our help. Bigger companies, you know, the 1,000 brands of The US or worldwide definitely need us, and we’re play and we’re working nicely with a lot of them.

But we’re also getting into the middle market, not SMBs, but middle market, and we’re seeing tremendous help that we can provide to our technology. So those are the kind of audiences that we’re targeting.

Jason Alfstein, Head of Internet Research, Oppenheimer: And so if I think about, like, going back two years ago, a good chunk of the business business was managed service DSP, like, you know, kind of more customized campaigns that were, like, harder to run programmatically. So on a self-service, you really needed, like, people with your expertise. Like but yet, like, that isn’t the most efficient. You’ve been transitioning away. So how much of the business would you say is is still managed service DSP right now?

Tal Jacobsen, CEO, Perion Network: So, you know, you’re absolutely right. As and as we said six months ago so we only launched this new strategy and new new split platform six months ago. And we said that, that it’s a transition phase. Right? So as we’re gonna look at the future in the next couple of years, everything is gonna be period one.

Everything is hopefully, most of it is gonna be self serve. But we still have all those, amazing working products that some of them actually need, managed service. Now having said that, since we’re getting into the AI era, and we just announced our new COO that is coming in, she’s gonna focus mainly on how do we make managed service streamlined through automation and AI versus manual work. Right? So that will free a lot of our, people to do more things to to our customers versus just doing manual work.

So even managed service today, you know, I think, Yap here, I love that he has a phrase of instead of self serve, he calls it AI served. Right? So even our

Jason Alfstein, Head of Internet Research, Oppenheimer: managed That’s where we’re going.

Steven Yap, Chief Revenue Officer, Perion Network: Yeah. I mean, it and that I think that’s So

Jason Alfstein, Head of Internet Research, Oppenheimer: the machines will eventually, all of the managed service becomes AI served, actually. That’s the better comparison. Right?

Steven Yap, Chief Revenue Officer, Perion Network: I mean and and I think right now, it’s I think there are a lot of things that are driving that. Right? It’s it’s also one thing that we that we often don’t talk about is it’s the education and the evolution of the end advertiser and the marketer. Right? Like, how how sophisticated are they?

And they’re they’re obviously a lot of companies that we know that that still do last click attribution, and things like that that that, you know, we we came up with, like, fifteen years ago as an industry. So I think the important thing too is is that, you know, as we move into the AI world, it becomes AI serviced. Right? And so it becomes much more efficient on that level. But the the cool thing is is that our ability to pivot and meet kind of marketers where they are in that moment.

Right? So look. If you’re using one channel, that’s great. We can help you there. If you need if you’re totally self sufficient, wonderful.

We’ll give you the keys to the tools and and off you go, and and we begin to layer on our AI on top of that to to help you be more efficient. If you need a hands, so we hold your hand all the way through the process, which we have a lot of clients. Our job is to also partner with them, right, to help them in their journey, to get them to be more sophisticated. So it’s you know, the optionality exists for for both, and I think a lot will also depend on, you know, how the marketers evolve over time, right, given

Jason Alfstein, Head of Internet Research, Oppenheimer: given I mean, I think that I think that’s actually kind of maybe an overlooked aspect where it’s like 100%. When you think about self, you know, kind of again, historically, to do self-service, I wouldn’t say you needed a level of simplicity, but, like, you needed a level, like, of standardization. Right? And it’s we all know it’s gotten more complicated, more features. Whereas, like, things that you really couldn’t figure out how to get the machine to do, you had people do, hence, service.

That being said, the AI becomes the replacement of the machines. And if you were the one doing that, presumably, the advertiser will look to you first with a machine based solution as opposed to you know, I no one’s really talking about it, but I think that’s that is an opportunity for for Perion if you can move fast enough.

Steven Yap, Chief Revenue Officer, Perion Network: Yeah. I mean, it’s it’s a huge opportunity. It’s something that we are, number one, completely focused on and heavily invested into. But, yeah, it it it’s it it presents a really cool opportunity, I think, to to, again, direct the market versus, you know, follow it.

Jason Alfstein, Head of Internet Research, Oppenheimer: So I’ll I’ll talk about channels for a minute. In the first half, your breakdown was 63% open web, 23% digital out of home, and 14% CTV. How do you see that that mix evolving, you know, with with the new products? And you also announced the, you know, the the the new CTV offering, as well if you wanna kinda weave that into the conversation.

Tal Jacobsen, CEO, Perion Network: Yeah. Absolutely. So, you know, as I said, our business is not focusing on channels. It’s focusing on decline. Right?

So within that, we’re constantly gonna see, you know, fluctuations in between the channels as long as we can get more and more budgets and more and more customers. Having said that, you know, we do feel very optimistic about how our CTV solutions are gonna grow. We’re already seeing you know, we have good indications, in q three and the pipeline. So we we’re feeling very comfortable, with with saying that we’re gonna, you know, beat the market in terms of the the the market growth in terms of CTV. I mean, we’re we’re feeling, more than comfortable with more than 20% on an annual base.

But, again, I think I think there’s, because we’re evolving into a new type of company, I think there’s a lot of confusion still about, I think some of the people think that our channels are are, like, separate businesses, and they’re not. Right?

Jason Alfstein, Head of Internet Research, Oppenheimer: So Well, they used to be, but they’re not anymore.

Tal Jacobsen, CEO, Perion Network: Absolutely. Absolutely. I think that’s where the confusion comes from. And I think the once you know it’s one business, and it’s okay if if a budget moves in between channels, as long as it stays with us, it’s fine. Right?

I think people thinks, well, if that moves down, maybe that specific business, which is CTV, is going down. No. It’s not a business. It’s a channel within a platform. Right?

But we do feel comfortable with CTV going up just because we think we have a a great solution there. We have actually three solutions. We have the high impact CTV. We have the performance CTV. And now we have Perion algo, which is actually the green bits part, which it, offers algorithm for CTV over YouTube.

Right? So all of those solutions should provide

Jason Alfstein, Head of Internet Research, Oppenheimer: just, like, what like like, just go into a little more detail on that. So so, like, what is that? Why is that appealing to an advertiser of that product?

Tal Jacobsen, CEO, Perion Network: The, Perionago?

Jason Alfstein, Head of Internet Research, Oppenheimer: Yeah.

Tal Jacobsen, CEO, Perion Network: Absolutely. You wanna

Steven Yap, Chief Revenue Officer, Perion Network: So the Perionago I mean, it’s it’s it’s incredibly appealing because when you look at CTV, right, the the lot of the questions around CTV were, you know, when it when it first came into the industry was a lot of of basically, it’s digital TV. Right? So it’s how do you measure it? Right? What are the metrics then we in which we can measure?

You know, what has been really kind of cool to watch is as Greenbids has kind of taken shape and now as as we kind of move it into kind of the parent algo, you know, we find our customers what they’re able to do is they’re able to give us their goals and their objectives. Right? So here are our KPIs. This is what I need you to hit. And when you consider the ways in which this is approaching versus here’s my budget, here’s kind of my creative, here are the channels I wanna be in.

They’re simply saying, here are the KPIs I need you to hit. Can you can you have your AI systems begin to optimize that? Now, obviously, you know, Green Bids was primarily focused on DV via you YouTube via DV, for a long time. But when you look at kind of the impact that they’ve had, they’ve been able to outperform basically every single client that they had signed on all of their KPIs. Right?

What’s really interesting now about that business as a marketer going into the kind of the AI era is and this kind of almost goes back to the channel conversations. But when you talk to a lot of our customers, it’s this mindset shift within the industry of, wow. So I can give you a budget and give you objectives, and then you can optimize for outcomes in those objectives. Right? Because the marketers of the future, what what eventually is gonna happen is the CFO is gonna give the CMO a budget and say, here’s $20,000,000, and I want a 5% return in this type of ROAS.

It’s gonna

Jason Alfstein, Head of Internet Research, Oppenheimer: not matter. And it’s basically what we’re saying. It’s Pmax. It is it’s Advantage Plus. It’s these basically products that the biggest walled gardens have created, and it’s almost like they’ve made the new standard, and everyone’s gonna have to, like like, the goalposts have been shifted.

Right? So

Steven Yap, Chief Revenue Officer, Perion Network: Yeah. Yes and yes and no. And and and in that, like, yeah. I mean, the Pmax I think Pmax was, the first iteration of this kind of Right. Based campaign metric.

But, again, when you kind of go back to where we’re really unique is that, look, we’re we’re agnostic from media technology and

Jason Alfstein, Head of Internet Research, Oppenheimer: Right. Right. That that’s Pmax in their solution as opposed to Exactly. All

Steven Yap, Chief Revenue Officer, Perion Network: the solution. And so this is what you’re also seeing from the industries. Everyone’s developing AI capabilities on top of their silos. You’re basically having siloed AI. Our our intent is we need AI to actually work like Greenbids does across multiple channels and multiple entities so that instead of me saying, oh, you buy more YouTube, it’s look.

The system’s the system is delivering outcomes for whatever circumstances they are based on the data. So a great example of that is, look. Like, in the dead of winter of New York, when you’re experiencing a blizzard, the system pulls in the weather data and figures out, look. I’m gonna start pulling budgets from digital out of home because no one’s walking the streets in New York. I’m gonna put it all to CTV because everyone’s at home nice and warm under their on their couch.

So being able to do very simple things and do them objectively with no other intention of I wanna drive you to my media or I wanna drive you to technology, I think that’s kind of where green bids gets really exciting, being able to layer kind of objective AI on top of all channels and allowing the system to then operate in in an in an intelligent way based on all the data feeds that that we have. Yeah.

Tal Jacobsen, CEO, Perion Network: I think there’s another another big shift happening now in the last few years where marketers are, looking themselves, like, basically traders. Like Yeah. Right? Investment managers. And they wanna get the best yields.

Right? So think about the green beds or perio and algo as we call it now. More like, an algo trading. Right? I I’m I’m putting a million dollars of investment.

I want the best the best yield. And we’ve we’ve improved, we’ve proved that to our customers that we can get up to 40% better yield on the same budget.

Jason Alfstein, Head of Internet Research, Oppenheimer: We don’t Basically, you don’t have to maybe you could the comparison in trading would be as opposed to having a trader who’s, like, watching a bid and be, like, looking for patterns and trying to make sure they’re, like, okay. Now I’m gonna place my order. Like, the algorithmic base that you know it’s gonna get you, maybe not, like, the top, you know, 98%, but you’re gonna be within the top 10%. And if you can save that time, it’s a good value trade off to give up the other eight points or something.

Steven Yap, Chief Revenue Officer, Perion Network: And it’s managing a portfolio. Right? Like, that’s why that’s why it’s so similar versus managing just a simple, I’m just trading this stock. This is all I’m gonna optimize for.

Tal Jacobsen, CEO, Perion Network: Right. Yeah.

Jason Alfstein, Head of Internet Research, Oppenheimer: So, I mean, so when we think about connected TV, I think a lot of like, whereas what we like, we still have somewhere between 90 and a $100,000,000,000 that’s still in linear TV. Okay? When we think about CTV, you know, the the most premium channels, right, the initial view was like, oh, you don’t need ad tech to buy it. You’re gonna mostly buy it direct or it’s gonna be, like, programmatic guaranteed, and the ad tech fee for that is gonna be, like, pretty small. Yet, like, as we’re, you know, now fast channels, right, are, you know, growing faster than than kind of, you know, you know, SVOD right now.

And you’re just seeing, like, more of a proliferation. And then, you know, where does, like, YouTube go? Right? Like, if you watch YouTube on your television, is that CTV or is that, like, online video? And so, I mean, maybe talk about how, like, the explosion of more outlets, like, kinda plays into that strategy where, like, maybe this wasn’t something that, you know, was even available to Perry on, like, two or three years ago.

Steven Yap, Chief Revenue Officer, Perion Network: Yeah. I mean, so I I think it’s it’s it’s a great question. It’s also a great example of why ad tech is actually needed. Right? We we created our own problem, now we’re trying to solve for the very problem that we created, which is the proliferation of channels.

You know, when we when you look across the digital ecosystem, I think that’s always been the issues. Like, there’s there’s content being created everywhere and anywhere at any given time. Now we’re seeing that in the in the video channel, in the video channel realm as well. You know, what we need the technology to do is understand, hey. Based on where your audience is, based on kind of what you’re watching, and then even you’re gonna start to layer in things like, you know, brand suitability.

Right? Like, those types of metrics. Having the system be able to intelligently go, okay. So we want this type of audience and this type of content, not this type of content. And I think, you know, when you when you look across the ad tech ecosystems, it’s it is very relevant.

I mean, you know, when you look at something like YouTube, right, you YouTube’s bought via AdWords and or it’s bought via DV. You know, there is and and there’s something to be said because there is a I would actually argue a vast majority of the YouTube buys happen via DV. And the reason Oh,

Jason Alfstein, Head of Internet Research, Oppenheimer: and and just for a moment, you don’t mean double verify. You

Steven Yap, Chief Revenue Officer, Perion Network: mean No. No. Sorry. Sorry. Sorry.

He’s already corrected me.

Jason Alfstein, Head of Internet Research, Oppenheimer: You’re using your legacy, you know, the

Steven Yap, Chief Revenue Officer, Perion Network: legacy on three sixty, the DS. Google’s DSP. Yeah. But there is there is something to be said of, hey. Like, marketers understand that they really need technology to cut through and make these buys much more efficient and optimize them.

And so your ability to do that in a tool is worth that investment. And so it’s it’s a lot of the reasons why, you know, you have DV three sixty, which customers are willing to pay for to buy YouTube, which is also owned by Google. Right. I do think technology is going to serve the industry much better and more efficiently, especially in the AI era where you’re able to very, very clearly define, here’s the target, here’s the accepted, brand suitability I’m looking for in terms of a grade, and then here’s, you know, here’s the budget that I’ve got, you know, and then and then allow the systems to actually optimize across the web for that.

Jason Alfstein, Head of Internet Research, Oppenheimer: I mean, it’s interesting. Right? Like, I mean, look, the the the ad agencies are merging to try to get efficiency. At the end of the day, like, they’re going to use AI to do more with less people. At the end of the day, it’s gonna be like their AI talking to your AI, talking to the publisher’s AI.

I mean, that’s kinda where this ends up going. I mean, everyone will give it, you know, the commands, but, like, there was a whole lot of stuff in the middle that was manual that’s basically going away.

Steven Yap, Chief Revenue Officer, Perion Network: Right. Yeah. That’s right. And it’s and look. I mean, I think I think when you look at the agency world, right, like, they’re they’re they’re combining for those two things.

Right? Efficiencies and the data play. Right? Because they also understand fundamentally, which is again why we why we want to be in into all of these different channels. Because not only do we want the optionality for our customers and say, look, we’ll deliver your ad and wherever wherever your customer may be, but also AI is only limited to, right, whatever data pools it sits sits at top of.

And so you’re seeing the agencies play because they now sit on top of these huge traditionally large data companies that they’ve acquired over the last couple of years. And so that’s kind of the efficiency play. They they recognize, hey. When we get the AI laid on top of this, we’ll be able to do that. Now I think it’s also interesting.

Right? Like, because you do have siloed AI. All these tech companies are making their little silos of, hey. I’ve got AI for search. I’ve got AI for this.

I’ve got AI for that. So, I think I think taking a more channel agnostic approach is what really the industry needs to get

Jason Alfstein, Head of Internet Research, Oppenheimer: AI for the a an AI that sits on the AI.

Steven Yap, Chief Revenue Officer, Perion Network: AI for the AI. Exactly.

Tal Jacobsen, CEO, Perion Network: Yeah. So I would just say that when we’re getting into the AI era, it’s not about AI. AI is great, and it it becomes a commodity. Right?

Jason Alfstein, Head of Internet Research, Oppenheimer: Yeah. It’s an efficiency tool. You’re still it’s all about outcomes at the end of the day. That’s kind of and that’s what you’re gonna be judged on by your clients.

Tal Jacobsen, CEO, Perion Network: Absolutely. And within that, AI, it’s not about the algorithm or the model. It’s about the data. Because if AI has the wrong data, it’s it will destroy everything you do. Right?

And we see that that AI is hallucinating. It’s becoming worse and worse because it now depend it now reads its own articles and making decisions based on whatever he’s it said before. Right? So our goal is if we’re gonna have a unified centralized platform, we’re gonna have so much data, and the, quality of data is gonna be so high that you will be able to depend your business upon versus silos, right, which is always harder to understand.

Jason Alfstein, Head of Internet Research, Oppenheimer: So let me let me ask a macro question. So, I mean, look. We’ve seen the business kind of pivot back to positive now. There’s obviously a lot of noise in in in the numbers on a year over year basis. But, I mean, did you see any kind of, in your opinion, macro impacts on the second quarter or not or not really?

Again, know was there any kind of tariff or, you know, do you see any categories pull back because you know, with blaming macro or not really in in the, you know, in the results I just got reported?

Tal Jacobsen, CEO, Perion Network: I think what we saw at the beginning of q two, we saw people, getting more nervous, and that’s why they’ve asked to push some of the budgets from CTV towards web where it’s proven to be more performative. They’re getting better results. But as we moved on, you know, to the the the last phase of q two, we saw we saw it coming back. We saw CTV coming back. We saw people getting more relaxed.

Now within the current situation in the market, I’m not sure anybody is fully relaxed, but things are getting we’re feeling that things are getting back to normal. We’re feeling, you know, again, within our customers, we’re feeling very comfortable, of them coming back, spending more and spending more on the more premium channels like CTV. Yeah. Yeah. Yeah.

I would I would

Steven Yap, Chief Revenue Officer, Perion Network: I would agree. I think I think as we enter into especially if you look at advertising, right, and digital ad spend, it’s you know, the vast majority of the industry holds you know, they they basically have this kind of ramp effect all the way going into late q three and into q four. As you enter the second half of the year, where they now okay. So the budgets have to go now from now until q four. This is where we’re gonna start to see the ramp up.

And I think anything that kind of from a macro level, anything that kind of shakes the market’s confidence a little bit in ad spending, I think the marketers go, well, hang on. Don’t know. Let me hold this for a minute, and then we’ll just start to and and then we’ll start to go. So to Tal’s point, yeah, there’s a little bit nervous, right, and hesitant in q at the start of q two, but then we just saw it basically go right back to where it was towards the end and and speaks to the the ton of confidence we have in looking at the early indicators of our q three that Yeah. Yeah.

We’re we’re we’re seeing the net effect of that. Yeah.

Jason Alfstein, Head of Internet Research, Oppenheimer: I I wanna go back to our gross margin for a second, kinda tying back to, PerionOne. So gross margins peaked around 90% in in ’22. It’s on track for something like 74% in our model this year. I mean, as you move towards CTV playing a bigger role, is that, like, positive or negative for gross margins?

Tal Jacobsen, CEO, Perion Network: So CTV, but not only CTV. As we move more towards a platform play and a lot of our features are are are gonna become more and more self served, we’re gonna become more efficient. You know? Or more Yeah.

Jason Alfstein, Head of Internet Research, Oppenheimer: You’ll just you’ll be supporting less systems, so there’ll be less Right. Kind of

Tal Jacobsen, CEO, Perion Network: cost to

Jason Alfstein, Head of Internet Research, Oppenheimer: support disparate systems.

Tal Jacobsen, CEO, Perion Network: Absolutely. So less system, less manual work, the opportunity to scale with, not necessarily with scaling the amount of people at the same magnitude. Right? So we, you know, we do predict that the company will become more and more and more efficient.

Jason Alfstein, Head of Internet Research, Oppenheimer: And then just maybe asking the same question around sales head and, like, you know, sales and marketing headcount. And, like, what’s you know, just how do you see that kinda, like, playing out, like, as the strategy goes? I mean, you know, if the business moves to more self-service, maybe there’s less people executing, but then you have more people selling. Like, you shift those resources, and then that gets you more growth, but that more growth is on a higher incremental margin.

Tal Jacobsen, CEO, Perion Network: Right. So I I think as we move towards the platform play, I think we’re gonna take a a page out of the books of Google and Meta. Right? You’re gonna you’re gonna need less salespeople to sell campaign by campaign, but you’re gonna transform your people, your salespeople to actually build relationship and implement your platform within bigger organizations and make sure that they’re actually using that. Right?

So we’re we’re gonna really transform to to a Google meta type of

Jason Alfstein, Head of Internet Research, Oppenheimer: So, basically, we’re gonna go do an upgraded Salesforce. You may have less sellers, but more experienced, better sellers with deeper relationships.

Steven Yap, Chief Revenue Officer, Perion Network: Yeah. I mean, I think I think when you when you start to look at a platform sell versus kind of an IO by IO, which was how historically media has been transacted, right, especially in some of the older businesses, it becomes a less transactional based relationship. In those transactions, you need to basically resource, right, like, kind of almost like a one to one relationship with each one of those buyers. In a larger kind of platform play, it’s a one to many. So, you know, what I would say is, look, I think that’s where we are now in this transition.

We’re moving towards kind of this, you know, in this evolution to get to that platform play. When we have it, right, when we’re when we’re kind of organized and ready to, and and push into the market, we do expect we’re gonna have better efficiencies, right, and better ratios in terms of, you know, what that revenue per head looks like. And then, obviously, we’re all about, you know, which is which is one of the cool things about the company. We’re all about looking like how do we invest in more growth. Right?

So as we see the growth, we don’t we don’t wanna just kind of rest on our laurels. How do we invest for more? And so what are the different markets that we can get into?

Jason Alfstein, Head of Internet Research, Oppenheimer: So, we have five minutes left. So just we left. We kept search till the very end. So, Tal, I mean, I guess, like, the the typical investor question is, like, is there a certain point at which, you know, you know, it’s not worth keeping search? Like, you shut it down because it’s just a distraction to manage.

So I guess, a, how much of it is that business a distraction to the advertising strategy, which is the future of the business? And I’ve looked it it is generating cash flow, but is there just a point at which it’s just not worth the organization’s effort?

Tal Jacobsen, CEO, Perion Network: Yeah. Well, I I would imagine that maybe in in this not in the next year or two, but at some point, maybe that will be the case. But for now, you know, it is generating $20,000,000 roughly a quarter. It’s pretty stabilized. We’re not putting any new investments in r and d on that product.

So as long as we can continue to generate revenue through that, we’re happy with that. It’s not it’s not It’s

Jason Alfstein, Head of Internet Research, Oppenheimer: not revenue. It’s as long as you can generate cash flow from it.

Tal Jacobsen, CEO, Perion Network: Right. Right. Absolutely. Cash flow. Absolutely.

So within that, as long as it keeps producing, you know, we’re happy about it. It’s not we’ve actually built our new company, the new Perion, in a way that this is not a distraction.

Jason Alfstein, Head of Internet Research, Oppenheimer: Got it. Though it’s a completely side business, you know, effectively, if if it got separated out tomorrow, it would have no impact on the organization.

Tal Jacobsen, CEO, Perion Network: Absolutely.

Jason Alfstein, Head of Internet Research, Oppenheimer: So okay. So one question came through online. Basically, it was asking about, you know, you’re generating cash. You know? Basically, why keep so much cash on the balance sheet?

You know? Why not expand buybacks, dividends, you know, at the current price? Because just mathematically, buybacks are more accretive than pretty much any acquisition you can do.

Tal Jacobsen, CEO, Perion Network: Yeah. No. I so I think we’re absolutely aligned. I think, you know, you saw that last quarter, we accelerated our buyback. I think last quarter, we actually bought buybacks pretty much at the same level of the amount of cash we’re gonna produce this year, and we’ve done this in one quarter.

Right? And we’re not gonna stop. We believe the stock, with everything we have going on, we believe the stock is not gonna stay that that cheap for so long, and that’s why we’re very bullish on continuing to buy it. At the same time, we do need the cash, some of the cash to continue to invest. You know, if we have big expectation of this, we are expecting to change a huge industry in a meaningful way, and that also involves, investments.

Jason Alfstein, Head of Internet Research, Oppenheimer: Great. I think that’s a perfect ending. Gentlemen, thank you very much for joining us today. If anyone has any more questions, online, feel free to reach out to us. We can connect you with the company.

So everyone, wherever you are, have a good rest of the day. Thanks, Jason. Thanks for having us.

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