Perion Network Ltd. 2026 Q2 Earnings Call

Thank you for joining us on Perion's earnings call for the second quarter of 2026. Nearly two years ago, we made a deliberate decision to diversify Perion away from the open web. We quickly adapt to the demands of the marketplace ahead of the budget shift the industry is experiencing today. This diversification was driven by both our organic investment in CTV and retail media, and our M&A strategy, from Hivestack and digital out-of-home, to Green Bids and the Outmax AI agent. Ever since, we've been doubling down on that strategy. This quarter results reflect that conviction, with strong traction across all our key growth engines. In the second quarter of 2026, we saw a massive adoption of the Perion One platform and its product lines. This reflects a growing advertising trust and accelerating adoption of our solution across our client base.

CTV, retail media, and digital out-of-home all outpaced the market. Our advanced AI technology, Outmax, continued to scale rapidly with a triple-digit year-over-year spend growth. We also continued to expand our reach this quarter, both geographically and in the depth of our platform capabilities. In retail media, Best Buy Canada selected Perion as its end-to-end in-store retail media technology partner, which is now available to our retail and digital out-of-home advertisers. As part of our strategy to double down on retail media and digital out-of-home, especially with in-store inventory, we expect those new partnership to unlock new budget from high growth verticals, the same verticals that are targeting consumers at the moment of purchase decisions. This quarter, we also added a new distribution partner to bring Outmax to Greece and to the Central and Eastern Europe.

This partnership extended our reach into new regions through the partner-led model. On the technology side, we extended our full-stack digital out-of-home infrastructure into Google DV360, giving buyers the ability to activate our programmatic guaranteed inventory through Google's media platform. We also launched an agentic self-serve mobile application within Perion1, which we call Ask Perion. This upgrade transform our execution capability to be more accessible to advertisers and agencies. New distribution channels, new retail media and digital out-of-home partnership, and advancing our technologies are exactly what's driving the sustainable momentum we're seeing across our growth engines. Marketers navigate a universe of channels, screens, platform, formats, data sets, and buying environments, all while consistently chasing higher performance. Budget, signals, and optimization remain siloed by channels. This fragmentation is exactly what breaks efficiency and performance. Perion1 is designed to close that gap with advanced technology-driven solutions.

Perion1 is our unified AI-native execution infrastructure for advertisers. It is built to plan, activate, and optimize advertising campaigns across CTV, social, digital out-of-home, retail media, and open web. At the center of Perion1 is Outmax, our proprietary AI agent, continuously optimizing outcomes across channels and platforms. Perion1 is an infrastructure, not a tool set. Here's what it looks like in practice. The advertiser's entry point is Perion1, our platform and AI execution layer. Under the hood, whenever we need outcome-driven activations, Outmax operates as an agent that plans and executes on our advertiser's behalf. Perion1 leverage multiple connections to audiences, data, and measurement technologies, including our own SORT audience segmentation technology. From there, Perion1 reaches into the channels themself. Every major open and walled garden DSP and SSP, from YouTube, Meta, TikTok, and the broader open web Plus our own Perion-owned digital out-of-home DSP and SSP.

It's an open ecosystem with effectively unlimited connections we keep adding, giving advertisers the reach to the entire global market. Outmax, our AI agent, works across all major channels, which allows us to optimize complex campaigns and drive better business outcomes to advertisers. Outmax removes the guesswork and replace it with algorithm certainty, allocating spend, managing pacing, and optimizing outcomes inside Perion1 and beyond. This quarter, we introduced Ask Perion, sparking deeper conversation with CMOs and agencies eager to get ahead of the agentic media buying curve. Ask Perion puts the power of Perion1 directly into the hands of advertisers and agencies through a simple conversational interface. Ask Perion is about making sophisticated execution more accessible to more customers. This expansion gives our customers easier access to our technology while embedding Perion1 more deeply within the infrastructure they use.

This quarter, Best Buy Canada selected Perion as its end-to-end in-store retail media technology partner for its digital signage network. Using Perion's ad server, SSP, and header bidding technologies, Best Buy Canada is moving from a fixed loop-based signage to a programmatic retail media model that selects ads dynamically. This technological adoption is designed to give advertisers more measurable in-store retail media campaign capabilities. For Perion, this partnership expands our retail media reach, deepens our role as a full-stack infrastructure partner, and supports a repeatable model for building more predictable infrastructure-level revenue streams over time. This full-stack infrastructure is also becoming easier for buyers to access. We added programmatic guaranteed deal execution for our digital out-of-home directly within Google's DV360 media platform. This gives buyers access to premium digital out-of-home inventory through their primary DSP.

With fixed pricing, committed inventory, and predictable delivery, this capability is available across our full global digital out-of-home supply reach, covering more than 1.6 million screens in over 40 countries. By bringing programmatic guaranteed digital out-of-home buying into the same workflow advertisers already use for display, video, and CTV, we're making our supply more accessible and expanding its monetization potential. We are also extending our reach geographically through our capital-efficient partner-led model. Most recently, we partnered with Acrossmedia241 to bring Outmax to agencies and brands across Greece and the broader central and eastern European region. Acrossmedia241 brings established relationships across agencies, national tourism boards, and international buying desks, as well as existing experience with Perion's digital out-of-home technology. Through this partnership, Outmax can be applied across major digital channels and optimized toward advertisers' defined business outcomes.

This builds on a distribution model we've already applied in other markets. The partnership is expected to accelerate Outmax path to revenue growth and extend our reach with low incremental costs and margin accretive growth potential. This quarter, we also added a new data partnership with Fetch, the leading consumer reward and purchase intelligence platform, accessed through LiveRamp. This gives our advertisers access to verified SKU-level purchase data from over 13 million monthly active users and 26,000-plus merchants. Purchase behavior is the most direct signal of consumer intent, and accessing it at a scale outside the closed platform has been a persistent industry challenge. Fetch data spans more than 1,300 retail-agnostic segments, from category-level shopper profiles to SKU-specific competitor targeting.

Taken together, those initiatives show how Perion One scales, first by embedding more deeply with enterprise customers, secondly, by expanding access to our infrastructure, and finally, by extending Outmax into new markets through our partners. This reach and trust are the foundation of our land and expand model, giving us a strong base to deepen customer relationships and drive sustainable growth over time. With that, I will hand it over to Elad to walk through the financials.

Thank you, Tal, and good morning, everyone. Our second quarter performance reflects our continued operational focus on driving scale and adoption across Perion One. In the second quarter, Perion One spend increased 15% year-over-year to $156.7 million. This was driven by the strong momentum in CTV and digital out-of-home channels, growing 56% and 45% year-over-year, respectively. In addition, our retail media vertical spend grew by 60%, partially offset by continued softness in the open web advertising across the industry. Perion One contribution ex-TAC came in at $34.9 million, down 4% year-over-year. This was driven by the use of promotional terms to acquire new accounts and drive incremental spend from existing customers, which temporarily impacted our take rates. As we scale the platform, take rates naturally normalize over time, though we expect them to modestly improve in the second half of the year.

Outmax, our AI agent, continued to scale rapidly, with spend growing 136% year-over-year on a pro forma basis, reflecting strong adoption across walled gardens. Our focus on delivering advanced technological solutions is translating into tangible enterprise wins. During the quarter, Best Buy Canada selected Perion as its end-to-end retail digital out-of-home technology partner, deploying our complete ad server, SSP, and header bidding technologies to power one of the largest SSP-enabled digital out-of-home media networks in Canada. This relationship validates our digital out-of-home business strategy. It allows us to replicate this offering to other retailers, growing our retail media business globally. We also remain focused on creating immediate value through our shareholders' return program. Our highly disciplined approach to capital allocation allowed us to repurchase 2.7 million shares for $24.5 million during the quarter.

Based on our growing visibility going into the second half of the year, the strong momentum we are seeing in our pipeline, new strategic agreements, and the structural efficiencies we have secured, we are narrowing our full-year guidance ranges. We are adjusting the high end of our contribution ex-TAC outlook to reflect the softer first half while maintaining the midpoint of our EBITDA guidance. I will discuss this in more detail shortly. Let's take a look at spend, the top-line metric which reflects customers' adoption of Perion solutions. Total spend for the quarter increased 9% year-over-year, reaching $194.7 million. More importantly, spend on the Perion One platform grew 15% year-over-year to $156.7 million, accounting for 80% of our total spend. This compares to 76% in the same period last year, proving that our unified platform strategy is successfully attracting enterprise media budgets.