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New DATA-DRIVEN AD TECH SOLUTIONS · PDF file 2020. 8. 26. · Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Debt Net

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Text of New DATA-DRIVEN AD TECH SOLUTIONS · PDF file 2020. 8. 26. · Q1-16 Q2-16 Q3-16...

  • DATA-DRIVEN AD TECH SOLUTIONS FOR BRANDS & PUBLISHERS COMPANY DECK

    August 2020

    1

  • $333B 2019

    Global Digital Ad Spend

    BIG ADDRESSABLE MARKET

    2

    Source: eMarketer.com 6/2020

  • ADDRESSABLE MARKET

    HUGE $526B 2024 FC,

    Global Digital Ad SpendTOMORROW

    3

    Source: eMarketer.com 6/2020

  • THE GIANTS ARE CONSOLIDATING THE WORLD 65%

    4

    Source: eMarketer.com 6/2020

  • ON AD SPENDING THE COVID19 IMPACT

    According to eMarketer, short- term change in average digital Ad spending due to the Pandemic decreased 25%-35%

    Source: eMarketer.com 4/2020

    5

  • 6

    Perion is well- positioned to capitalize on any shifting budget between 3 main pillars of digital advertising

    265,470 299,537

    333,993 365,554

    391,781 411,810

    426,124

    2017 2018 2019 2020 2021 2022 2023

    PERION’S DIVERSIFICATION STRATEGY

    Ad Spend ($M)

    Source: Statista 10/2019

    Search Advertising 45%

    Social Advertising 35%

    Display Advertising 20%

  • PERION’S DIVERSIFICATION STRATEGY SEARCH ADVERTISING

    VIDEO & DISPLAY

    20%

    SEARCH 42%

    SOCIAL MEDIA

    38%

    7

  • Online retailers are leading to greater competition in the auction

    Improved algorithms accuracy

    Direct correlation between search and online purchases.

    MARKET TRENDS

    8

    Source: eMarketer.com 6/2020

    Search Ad Spending $M Worldwide, 2019-2024

  • FOR 10 YEARS A STRATEGIC PARTNER

    9

  • * Microsoft 10K 7/2020 ** Statcounter.com, 7/2020

    963M UNIQUE

    GLOBAL VISITORS

    144B YEARLY

    SEARCHES

    18.5% SEARCH SHARE

    IN U.S. (PC)**

    IN NUMBERS

    +1% GROWTH IN REVENUES*

    $7.7B IN REVENUES FY2020 YTD*

    10

  • CODEFUEL MARKET RECOVERY

    11

  • BEND THE CURVE OUTPERFORM THE BENCHMARK

    -2% YoY

    12

    37.6

    34.4 33.3 34.3 31.6

    29.6 31.0

    34.7 35.3

    42.3 44.2

    51.8

    42.3 41.6

    Q1 -1

    7

    Q2 -1

    7

    Q3 -1

    7

    Q4 -1

    7

    Q1 -1

    8

    Q2 -1

    8

    Q3 -1

    8

    Q4 -1

    8

    Q1 -1

    9

    Q2 -1

    9

    Q3 -1

    9

    Q4 -1

    9

    Q1 -2

    0

    Q2 -2

    0

    Based on benchmark -25%

    YoY

    +10

  • COLLABORATION WITH CHECK POINT

    66

    Keywords Data

    Traffic Validation

    CodeFuel Hosted Search

    Data Analysis

    Device GEO ad Unit Channel A/B testing

    Search Query

    Revenues Optimization (CPC / RPM)

    13

  • COLLABORATION WITH

    14

  • You Have the Right to Remain Private

    73% Of consumers surveyed are more aware of data breaches compared to five years ago

    78% said they are taking action to limit the amount of personal information they share online

    PRIVADO CO-DEVELOPED BY CODEFUEL AND MICROSOFT

    15

  • Advertising

    16

    PERION’S DIVERSIFICATION STRATEGY DISPLAY & SOCIAL ADVERTISING

  • Brands in housing media buying capabilities

    Performance marketing growing

    Death of the cookie imminent

    Continued growth of walled gardens

    Creative matters

    KEY GUIDING TRENDS

    17

  • FULL FUNNEL– CUSTOMER JOURNEY

    18

  • (RPM) (CPM)

    O&O Sites

    Personalized Content and

    Layout

    5-7 minutes

    per session

    Audience targeting Buying System

    Landing Page

    Display Ad Units

    Display To Search

    Cost Per Click

    Maximize PPS – Profit Per Session

    ADVERTISING STRATEGY Full Funnel Attribution Modeling

    Ad Intelligence Graph (AIG)

    (CPA)

    19

    Action

    Predictive Analytics

  • O&O BUSINESS MODEL EVOLUTION

    Yield optimization

    Platform

    Display 2 Search Format

    CIQ As a Service

    CIQ As a Platform

    Enhance Synchronized

    digital branding

    Q2/2020 2021Q3/2020 Q3/2020Q1-Q3 /2020

    Establish O&O Network

    Externalized ContentIQ services To other publishers (Mini-Site)

    CIQ Synergy with CodeFuel and Undertone

    20

  • 21

    18.6 21.3 21.6

    26.4 23.7

    18.7

    39.9 42.4

    Q1 -1

    9

    Q2 -1

    9

    Q3 -1

    9

    Q4 -1

    9

    Q1 -2

    0

    Q2 -2

    0

    H1 -1

    9

    H1 -2

    0

    ADVERTISING – KEEPING THE MOMENTUM DESPITE COVID

  • CONNECTING THE WORLD’S BEST BRANDS & PUBLISHERS WITH AWARD-WINNING CREATIVES

    AWARDSPUBLISHERSBRANDS

    22

  • PERION’S TURNAROUND – A THREE PHASES’ APPROACH

    Cost optimization Building Tech-Moat Ignite Growth Phase 1 Phase 2 Phase 3

    23

  • Key Turnaround Financial Optimization Milestone ($M)

    24

    92.5 86.2 86.9

    77.7

    64.6 64.4 62.3 60.7

    50.2

    40.8 39.7 40.5

    31.0

    20.8 18.8 16.7 14.6 12.5

    -43.7

    35.4

    Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20

    Debt Net Cash

    Phase 1

    In H1 2020 we paid $15M for CIQ acquisition. Total Cash $47.9M Total Debt $12.5M

    Cost optimization

  • 25

    33%

    28% 26% 26%

    6% 7% 8%

    10%

    2017 2018 2019 2020

    Revenue OPEX R&D

    * 2020 revenues and expenses are based on management mid point guidance and analysts’ estimates

    Building Tech-Moat

  • Ignite Growth

    274

    253 261

    2017 2018 2019 2020

    GR OW

    TH D

    RI VE

    RS

    ContentIQ / PubOcean Accretive acquisition

    Microsoft partnership, Launch of Privado

    Synergistic AD solution

    Revenues ($M)

    26

    276-286

  • 27

    1. CIQ costs synergy 2. Vendors and consultants'

    terms renegotiation 3. Reduced travel and

    marketing expenses 4. Reduced rent expenses 5. Automation processes to

    reduce costs

    All the measures we’ve taken resulted in more than $10 million of proforma* cost savings annualized

    Proforma Cost-Savings of more than $10M YoY

    0.7

    1.8

    2.6

    5.6

    R&D

    G&A

    S&M

    COGS

    WHAT WE’VE DONE SO FAR:

    * - combined financial results of CIQ as if it was acquired at the beginning of 2019.

  • ADJUSTED EBITDA ($M) 2019 - 2020

    27

    29.6

    32.5

    7.4

    2.5

    8.7

    11-13

    2018 2019 Q2-19 Q2-20 H1-20 H2-20

    H2 2020 Guidance

  • 2020 GUIDANCE Based on our current

    visibility we expect the following results:

    28

    ($M) H1 2020 H2 2020 2020

    Revenue $126.4 $150-$160 $276-$286

    Adj EBITDA $8.7 $11-$13 $20-$22

  • www.perion.com 29

    Appendix

  • Balance Sheet Overview ($M)

    Current Assets 31/12/2019 30/06/2020 Current Liabilities 31/12/2019 30/06/2020

    Cash and cash equivalents 38.4 31.0 Current maturities of long-term loans and Convertible debt 8.3 8.3

    Restricted cash 1.2 1.2 Accounts payable 47.7 36.6

    Short-term bank deposit 23.2 16.9 Accrued expenses and other liabilities 18.4 15.0

    Accounts receivable, net 49.1 35.9 Short-term operating lease liability 3.7 3.8

    Prepaid expenses and other current assets 3.2 3.3 Deferred revenues 4.2 3.9

    115.1 88.3 Payment obligation related to acquisitions 1.0 13.9

    83.3 81.5

    Non-Current Assets 31/12/2019 30/06/2020 Long-Term Liabilities 31/12/2019 30/06/2020

    Property and equipment, net 10.9 8.6 Long-term Debt 8.3 4.2

    Operating lease right-of-use assets 22.4 20.7 Long-term operating lease liability 20.4 18.4

    Intangible assets, net 2.7 17.2 Payment obligation related to acquisitions - 12.1

    Goodwill 125.8 149.2 Other long-term liabilities 6.6 6.0

    Deferred taxes & Other assets 6.9 6.5 35.3 40.7

    168.7 202.2

    Shareholders' Equity 31/12/2019 30/06/2020

    165.2 168.3

    Total Assets 283.8 290.5 Total Liabilities and Shareholders' Equity 283.8 290.5

    30

  • Income Statement GAAP Basis ($M)

    31

    Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 2017 2018 2019 2019 2020

    Advertising 29.3 33.2 26.2 37.3 18.6 21.3 21.6 26.4 23.8 18.7 134.5 126.0 87.9 39.9 42.4

    Search and other 31.6 29.6 31.0 34.7 35.2 42.3 44.2 51.8 42.3 41.6 139.5 126.8 173.6 77.5 84.0

    Total Revenues 60.9 62.8 57.2 72.0 53.8 63.6 65.8 78.2 66.1 60.3 274.0 252.8 261.5 117.4 126.4

    Customer acquisition costs 31.9 31.1 28.8 36.6 27.4 33.2 34.2 41.1 36.1 36.8 130.9 128.4 135.9 60.6 72.9

    Media Margin 29.0 31.7 28.4 35.4 26.4 30.4 31.6 37.1 30.0 23.5 143.1 124.4 125.6 56.8 53.5

    % of Revenues 47.6% 50.5% 49.7% 49.2% 49.1% 47.8% 48.0% 47.4% 45.4% 39.0% 52.2% 49.2

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