Perion Networks Inc. (Nasdaq:PERI: TASE:PERI) today announced partnerships with Yahoo! Inc. (Nasdaq: YHOO) and Conduit Ltd. and published strong revenue and profit growth for the second quarter of 2012, which nonetheless were below forecasts.
Perion CEO Josef Mandelbaum said, "Yahoo! is one of the most recognized names in search, and a company with a long history of innovation. Perion is pleased to add Yahoo! as a search provider and hopes that this agreement is the beginning of a long and fruitful relationship. Perion has now partnered with four leading search providers, creating a balanced and diversified strategic base for the company’s search advertising revenue stream."
Mandelbaum also announced a search and distribution partnership agreement with Conduit, bringing the number of partners to five, in addition to Google Inc. (Nasdaq: GOOG), Ask.com, and Bing.
As for Perion's financials, the company reported 99% revenue growth to $24.4 million for the second quarter from $12.3 million for the corresponding quarter of 2012. The company attributed the growth to the diversification search partners, with Google, accounting for just 51% of revenue in the second quarter.
Non-GAAP net profit rose 85% to $3.4 million ($0.26 per share) for the second quarter from $1.8 million for the corresponding quarter. Cash flow from operations rose five-fold to $14.3 million in the first half from $2.5 million in the first half of 2012.
In its guidance for the third quarter, based on industry trends, Perion forecasts $20-30 million revenue, 30% above the corresponding quarter, and earnings before interest, taxes, depreciation and amortization (EBITDA) of $4.5-5.5 million, up 32%.
Perion missed the analysts' consensus of earnings per share of $0.33 on $25.7 million revenue. The guidance is below the analysts' consensus of $28.2 million revenue.
"In the past seven months we have significantly diversified and strengthened our search business,” said Mandelbaum. “However, the implementation of these partnerships has taken longer than we expected, dampening our second quarter results and pushing revenue expected in the third quarter into the fourth quarter of the year. With implementation of these partnerships now well underway and the new product launch of Guardius, in addition to our other products, we are well positioned for future growth in the fourth quarter and leading into 2014."
Published by Globes [online], Israel business news - www.globes-online.com - on August 12, 2013
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