Earnings call transcript: Perion Network Q1 2026 earnings miss impacts stock

Perion Network Ltd (PERI) reported its first-quarter 2026 earnings, revealing a miss on both earnings per share (EPS) and revenue forecasts. The company posted an EPS of $0.11, falling short of the anticipated $0.13, and revenue of $90.4 million, below the expected $92.92 million. These results led to a pre-market stock decline of 16.49%, reflecting investor disappointment.

Perion Network’s performance in Q1 2026 was marked by disciplined execution amid challenging market conditions. While the company achieved a slight year-over-year revenue increase of 1%, it struggled with profitability, as evidenced by a decline in adjusted EBITDA and a GAAP net loss of $10 million. The company continues to focus on strategic growth initiatives, particularly in AI technology and partnerships.

Perion Network’s Q1 2026 EPS of $0.11 missed the forecast of $0.13 by 15.38%. Revenue also fell short, coming in at $90.4 million against the expected $92.92 million, a negative surprise of 2.71%. These misses contributed to the negative market reaction.

Following the earnings announcement, Perion Network’s stock experienced a pre-market decline of 16.49%, dropping from $10.67 to $9. This significant decrease reflects investor disappointment with the company’s performance and the missed earnings and revenue targets. The stock now trades at $9.15 with a market capitalization of $346.5 million. Despite the sell-off, InvestingPro analysis suggests the stock appears undervalued at current levels, with a Fair Value indicating significant upside potential. The company is featured on InvestingPro’s Most Undervalued stocks list, which tracks compelling value opportunities across the market.

Despite the Q1 2026 results, Perion Network remains optimistic about future growth, driven by its strategic investments in AI technology and partnerships. The company anticipates Perion One to grow significantly, contributing 85%-90% of the full-year 2026 Contribution ex-TAC. Notably, while the company wasn’t profitable over the last twelve months, analysts predict it will return to profitability this year, with net income expected to grow. For deeper insights into PERI’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, one of 1,400+ available on InvestingPro, which transforms complex Wall Street data into clear, actionable intelligence.

CEO Doron Gerstel stated, "While we faced headwinds this quarter, our strategic investments in AI and partnerships position us well for future growth." CFO Maoz Sigron added, "We remain committed to disciplined financial management and are confident in our long-term growth strategy."

During the earnings call, analysts questioned the impact of macroeconomic factors on future performance and sought clarity on the company’s strategic initiatives in AI technology. Executives emphasized their focus on long-term growth and the potential of strategic partnerships to drive revenue.

Operator: Hello everybody and welcome to the Perion Network first quarter 2026 earnings conference call. Today’s conference call is being recorded, and an archive of the webcast will be posted on the company’s website. The press release detailing the financial results is available on the company’s website at www.perion.com. Before we begin, I’d like to read the following safe harbor statement. Today’s discussion includes forward-looking statements. These statements reflect the company’s current views with respect to future events. These forward-looking statements involve known and unknown risks, uncertainties, and other factors, including those discussed under the heading "Risk factors" and elsewhere in the company’s annual report on Form 20-F that may cause actual results, performances, or achievements to be materially different, and any future results, performances, or achievements anticipated or implied by these forward-looking statements. The company does not undertake to update any forward-looking statements to reflect future events or circumstances.

As in prior quarters, the results reported today will be analyzed both on a GAAP and on a non-GAAP measure. Whilst mentioning EBITDA, we will be referring to adjusted EBITDA. We have provided a detailed reconciliation of non-GAAP measures to their comparable GAAP measures in our earnings release, which will be available on our website and has also been filed on Form 6-K. Hosting the call today is Tal Jacobson, Perion’s Chief Executive Officer, and Elad Tzubery, Perion’s Chief Financial Officer. I would now like to turn the call over to Tal Jacobson. Please go ahead.

Tal Jacobson, Chief Executive Officer, Perion Network: Good morning and thank you for joining us on Perion Network’s earnings call for the first quarter of 2026. 2025 was year 1 for the new Perion Network. 2026 focuses on advancing our new technologies and accelerating their adoption among our clients. In the first quarter of 2026, we saw an increase across all our growth engines. Our fastest growing channels, CTV and digital out-of-home, outgrew the market. In retail media adoption, we experienced significant growth that Elad Tzubery will present. I’m also happy to share that Outmax, our AI agent technology that was part of the Greenbids acquisition, is growing rapidly and is becoming a meaningful part of Perion One. A few important data points from our quarterly numbers. The Perion One product line is seeing an increase of 6% in marketing budgets, which we refer to as spend.

This is an encouraging number as we see a faster adoption of our platform and the Outmax AI agent usage among our clients. You can also recognize that both acquisition Hivestack and Greenbids were extremely successful as both out-of-home and Outmax numbers are continuing to grow quarter after quarter. This represents our ability to acquire high-quality companies and integrate them efficiently. Perion One is designed to solve the complexity of the global advertising ecosystem that is both massive and fragmented. Marketers navigate in a universe of screens, platforms, formats, data sets, and buying environments while trying to achieve higher standards of performance. Budgets, signals, and optimizations are siloed by channels, creating a challenging fragmentation that leads to efficiency and performance breakdown. This is the core challenge we’ve been focused on solving. We are building Perion One as an AI-native execution infrastructure to unify the fragmented ecosystem for both advertisers and publishers.

Perion One enables advertisers to perform highly complex marketing activities. It allows them to make confident decision faster while continuously optimizing every campaign in real-time. With Perion One, publishers are able to maximize inventory value through smarter demand allocation and yield optimization. By aligning execution across both sides of the ecosystem, demand and supply, Perion One improves efficiency, performance, and outcomes end to end. Perion One is an infrastructure, not a tool set. The most advanced part of Perion One is the Outmax technology, our AI agent, which is showing tremendous growth. Outmax goal is to be the one AI agent for every channel, whether it’s YouTube, Facebook, Instagram, NBC, or Disney+. Outmax is designed to act as an intelligent execution agent that ensures every dollar spent is working at its maximum potential. Outmax removes the guesswork and replaces it with algorithm certainty.

It is designed to allocate spend, manage pacing, and optimize outcomes in real time, both inside Perion One and on external platforms. We’re continuously expanding the channels and platforms that Outmax connects to. This quarter, we announced Outmax for TikTok, which is already showing great results. TikTok is one of the fastest-growing advertising platforms in the world, with 1.6 billion users and ad revenue projected to exceed $50 billion by next year. Outmax for TikTok early results are strong, with Outmax already delivering up to 25% lift in performance on TikTok. This is exactly the land and expand pattern that we are focusing on. Adding new high-growth channels, clear performance advantages, and a global path to allow us to scale across more customers and more platforms. This quarter, we entered into an exclusive partnership with McSorely Media and Mediamark, deploying Outmax AI Agent across Africa.

This new partnership unlocks a programmatic market forecasted to reach $6.5 billion by 2029, growing at a 15.3% CAGR. The value this partnership brings is clear. Outmax AI Agent and Perion’s programmatic digital out-of-home capabilities, paired with our partners’ agency footprint across Africa, create an accelerated distribution for our technologies across the region. This expands Perion’s commercial footprint and creates new revenue channels without adding further expenses to our P&L. The following case studies show how the same execution model delivers for different brands. Bouygues Telecom, one of the leading French telcos, deployed Outmax across always-on campaigns. They embedded Outmax into their enterprise marketing operations to continuously control and optimize media execution. The results show 34% lower customer acquisition cost and a 51% reduction in carbon intensity. Bouygues is already extending Outmax to additional channels. Another example of the land and expand model in action.

C4 Energy is one of the fastest-growing energy drinks brands in the U.S., with a younger, performance-oriented audience. This makes YouTube a crucial channel for reaching their consumers. C4 Energy turned to Perion to achieve a greater control across their audience targeting and contextual placement on YouTube. The results speak for themselves. A skippable view rate of 80% above the benchmark, a 20.7% lift in brand awareness, and a 4.1 lift in brand ad recall. Wepner, a clothing brand known for its youthful style and bold statement pieces, ran a multi-channel campaign across Meta and YouTube with O