Perion Network Q2 2026 Earnings Report

Perion Network EPS Results

• Actual EPS: $0.09
• Consensus EPS: $0.08
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: N/A

Perion Network Revenue Results

• Actual Revenue: $98.24 million
• Expected Revenue: $96.72 million
• Beat/Miss: Beat by +$1.52 million
• YoY Revenue Growth: N/A

Perion Network Announcement Details

• Quarter: Q2 2026
• Date: 8/11/2026
• Time: Before Market Opens
• Conference Call Date: Monday, August 10, 2026
• Conference Call Time: 8:30AM ET

Perion Network (NASDAQ:PERI). (NASDAQ: PERI) is a digital advertising technology company that offers a suite of solutions designed for both brand marketers and performance-driven advertisers. The firm’s platform integrates search monetization, programmatic display, video and connected TV (CTV) advertising to help clients reach and engage audiences across desktop, mobile and television environments. Through proprietary algorithms and AI-driven tools, Perion’s technology optimizes ad placements in real time, aiming to boost campaign efficiency and return on investment for publishers and advertisers alike.

Key offerings include search engine marketing services that cover major platforms such as Google and Bing, native and display advertising solutions under its Undertone brand, as well as social and video ad formats. The company also provides audience insights and data analytics to inform targeting strategies and creative messaging. By combining its direct-sold ad inventory with programmatic buying, Perion delivers cross-channel campaigns that cater to clients in industries ranging from e-commerce and retail to finance and entertainment.

Headquartered in New York City and Tel Aviv, Perion operates globally with offices in North America, Europe and the Asia-Pacific region. Over the years, the company has expanded both organically and through strategic acquisitions, including the 2017 purchase of Undertone. Under the leadership of CEO Doron Gerstel, Perion continues to develop innovative ad tech solutions aimed at refining digital media buying and maximizing publisher yield on a worldwide scale.

Perion Network Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Perion One adoption accelerated, with platform spend up 15% year over year to $156.7 million. CTV, digital out-of-home, and retail media spend grew 56%, 45%, and 60%, respectively, while Outmax spend increased 136% on a pro forma basis.
• Negative Sentiment: Consolidated revenue declined 5% to $98.2 million and contribution ex-TAC fell 11% to $42.3 million, pressured by weakness in open-web advertising and lower take rates from promotional test campaigns. Management expects take rates to improve modestly in the second half.
• Positive Sentiment: Management narrowed its 2026 outlook to $215 million–$225 million of contribution ex-TAC and $51 million–$53 million of adjusted EBITDA, maintaining the EBITDA midpoint and anticipating meaningful margin improvement in the second half from cost reductions and operational efficiencies.
• Positive Sentiment: Two large strategic agency agreements are onboarding and are expected to contribute materially beginning late in the third quarter and accelerating in the fourth quarter, although timing remains partly outside Perion’s control. The company also cited the Best Buy Canada retail-media partnership, expanded Google DV360 access for digital out-of-home inventory, and new Outmax distribution in Greece and Central and Eastern Europe.
• Positive Sentiment: Perion repurchased 2.7 million shares for $24.5 million during the quarter and plans to complete the remaining $33.2 million under its current buyback authorization by year-end. The company ended June with $268 million in cash and marketable securities and no debt, while retaining flexibility for technology investment and disciplined M&A.

Presentation

[Operator]

Hello, everybody. Welcome to the Perion Network second quarter 2026 earnings conference call. Today's conference call is being recorded. 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 headings 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, performance or achievements anticipated or implied by these forward-looking statements.

[Operator]

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 a non-GAAP basis. While mentioning EBITDA, we will be referring to adjusted EBITDA. We have provided a detailed reconciliation of non-GAAP measures and their comparable GAAP measures in our earnings release, which is available on our website and has also been filed on Form 6-K. Hosting the call today are 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, CEO at Perion Network]

Good morning. 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 Greenbids 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.

[Tal Jacobson, CEO at Perion Network]

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.

[Tal Jacobson, CEO at Perion Network]

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 Perion One, which we call Ask Perion.

[Tal Jacobson, CEO at Perion Network]

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. Perion One is designed to close that gap with advanced technology-driven solutions.

[Tal Jacobson, CEO at Perion Network]

Perion One 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 Perion One is Outmax, our proprietary AI agent, continuously optimizing outcomes across channels and platforms. Perion One is an infrastructure, not a tool set. Here's what it looks like in practice. The advertiser's entry point is Perion One, 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.

[Tal Jacobson, CEO at Perion Network]

Perion One leverage multiple connections to audiences, data, and measurement technologies, including our own SORT audience segmentation technology. From there, Perion One 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.

[Tal Jacobson, CEO at Perion Network]

Outmax removes the guesswork and replace it with algorithm certainty, allocating spend, managing pacing, and optimizing outcomes inside Perion One 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 Perion One 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 Perion One more deeply within the infrastructure they use.

[Tal Jacobson, CEO at Perion Network]

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.

[Tal Jacobson, CEO at Perion Network]

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.

[Tal Jacobson, CEO at Perion Network]

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+ merchants.

[Tal Jacobson, CEO at Perion Network]

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.

[Elad Tzubery, CFO at Perion Network]

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.

[Elad Tzubery, CFO at Perion Network]

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.

[Elad Tzubery, CFO at Perion Network]

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. Finally, 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.

[Elad Tzubery, CFO at Perion Network]

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.

[Elad Tzubery, CFO at Perion Network]

This was driven by the continuous acceleration of our core growth engines. CTV spend grew 56% year-over-year to $17.7 million. Digital Out-of-Home spend grew 45% year-over-year to $87.7 million. Both continue to vastly outpace the broader market growth expectations as advertisers are actively shifting budgets towards Perion One to gain precise performance and cross-channel execution. In addition, our Retail Media vertical spend significantly accelerated, growing 60% year-over-year to $59.4 million. Retail Media represents a strategic focus for Perion, bringing together our CTV, Digital Out-of-Home, and display capabilities.

[Elad Tzubery, CFO at Perion Network]

Enterprise mandates like Best Buy Canada demonstrate our ability to modernize in-store media networks. This uniquely positions us to bridge the physical and digital worlds. The combination of physical and digital unlocks powerful synergies between in-store digital screens and external Digital Out-of-Home screens, delivering a truly unified end-to-end customer journey that few in the industry can match. Revenue for the second quarter was $98.2 million, down 5% year-over-year. Contribution ex-TAC for the second quarter was $42.3 million, down 11% year-over-year. Perion One contribution ex-TAC was $34.9 million, representing 83% of total contribution ex-TAC in the quarter, up from 76% last year. Perion One contribution ex-TAC declined 4% year-over-year, mainly due to our use of promotional terms to acquire new accounts and drive incremental spend from existing customers through our platform.

[Elad Tzubery, CFO at Perion Network]

As we continue to scale the platform, we expect take rates to naturally normalize over time, though modestly improve in the second half of the year. As expected, search revenue declined 2% year-over-year, while search contribution ex-TAC declined 30% year-over-year. We continue to manage the search business to maximize cash flow to reinvest into Perion One and return capital to shareholders through share repurchase program. Adjusted EBITDA for the second quarter was $2.8 million, representing a 7% margin of contribution ex-TAC. This includes a $1.6 million of foreign exchange headwind. Excluding this foreign exchange impact, adjusted EBITDA would have been $4.4 million. As we are scaling our top line and capturing more market share, we remain focused and disciplined on improving our operational efficiency.

[Elad Tzubery, CFO at Perion Network]

At the end of the second quarter, we executed targeted efficiency initiatives to optimize our cost base as part of this year's efficiency plan. While the second quarter did not benefit from these actions, we expect adjusted EBITDA margin to meaningfully inflect upward in the second half of the year to reach our full-year targets. On a GAAP basis, second quarter net loss was $6.8 million, or $0.18 per diluted share. On a non-GAAP basis, net income was $3.9 million, or $0.09 per diluted share. It is important to emphasize that the year-over-year increase in our GAAP net loss was almost entirely driven by negative foreign exchange impact to our non-operating finance income and lower interest income from our cash balance.

[Elad Tzubery, CFO at Perion Network]

While our underlying operations remain profitable on a non-GAAP basis, the combination of these non-operating financial headwinds and the lower outstanding share count mathematically amplifies our GAAP loss per share this quarter. However, we are making a highly strategic trade-off. By aggressively executing our buybacks now at depressed valuations, we are permanently reducing our share count. As our profitability scales in the second half of the year and into 2027, this concentrated equity base is expected to serve as a powerful multiplier for future EPS growth. In the second quarter, we generated $2.5 million in net cash from operating activities, while adjusted free cash flow reached $4.8 million.

[Elad Tzubery, CFO at Perion Network]

On a yearly basis, we expect to maintain a strong conversion rate relative to adjusted EBITDA, as we did in previous years. This reliable cash generation provides us with the financial flexibility to fund our organic growth initiatives, invest in platform innovation, and support our shareholders' return commitments, all without stretching our balance sheet. As of June 30, 2026, we held $268 million in cash equivalents, short-term bank deposits, and marketable securities, with zero debt. During the second quarter, we continued the strong execution of our shareholder return program. We repurchased 2.7 million shares for $24.5 million at an average price of $9.12 per share. Since the initiation of this buyback program nine quarters ago, we have repurchased a cumulative total of 18 million shares for $166.8 million. By the end of this year, we plan to fully execute the remaining $33.2 million under the current plan.

[Elad Tzubery, CFO at Perion Network]

Repurchasing our stock at current valuation levels reflects our confidence in Perion's long-term value and future prospects. Turning to our updated 2026 outlook. Based on our increased visibility for the second half of the year and the momentum we see building in our pipeline, we are narrowing our full year 2026 outlook ranges. We now expect contribution ex-TAC of $215 million-$225 million and adjusted EBITDA of $51 million-$53 million, implying an adjusted EBITDA margin of 24% at the midpoint. Our confidence in meeting this guidance is driven by tangible second half catalysts. Leading these catalysts is the execution of large-scale strategic agreements. These recently signed agreements are actively in the onboarding phase. Their material financial contribution is expected to kick in towards the end of the third quarter and accelerate moving forward.

[Elad Tzubery, CFO at Perion Network]

In addition, the continued scaling of Perion One growth engines, combined with a streamlined sales organization, is rapidly converting a robust pipeline into realized spend. In parallel to our top line expansion, operational efficiency remains a core priority. In the first half of the year, we took decisive steps to optimize our cost structure and streamlined operations. These deliberate actions are yielding productivity gains and cost savings designed to positively impact our profitability starting in the second half of the year and beyond. With an optimized expense base and growing momentum across Perion One, we are scaling our business on a strong agile foundation, and we remain completely on track to achieve our 2028 growth and efficiency targets. With that, I will now turn the call back to the operator for the Q&A session. Thank you.

[Operator]

If you wish to ask a question, we ask that you please use the raise hand function at the bottom of your Zoom screen. If you have dialed in today, please press star nine. Our first question comes from Andrew Marok at Raymond James. Andrew, you may now unmute your line and ask your question. Thank you.

[Andrew Marok, Analyst at Raymond James]

Thanks for taking my questions. Maybe first on the Outmax and Ask Perion trends that you're seeing so far. Obviously, the double-digit growth in Outmax is great to see. Can you also talk about the synergy possibilities you've seen between Ask Perion and Outmax, and maybe more generally, what you're seeing with clients and tools like this are helping to make complex workflows more effective.

[Tal Jacobson, CEO at Perion Network]

Thank you, Andrew. You were breaking up, so I'll see if I got all of it. Outmax grew and continues to grow very fast. We do see synergies between our products, as Outmax is now pushing a lot of CTV, retail, and social. Outmax is becoming an integrated part of Perion One. It actually drives a lot of the AI technologies within the platform. Again, you were breaking up a bit, I'm not sure I answered the entire question. If you want to repeat the parts that were not answered, that'd be great

[Andrew Marok, Analyst at Raymond James]

I think you got most of it. It was really just kind of the synergies between Ask Perion and Outmax, both kind of these agentic tools and how generally the agentic workloads that you're bringing to market are helping make some of these complex workflows for advertisers more accessible.

[Tal Jacobson, CEO at Perion Network]

Yeah. Absolutely, the agentic solution that we have, including Ask Perion, is fully integrated with Outmax. Outmax actually provides a lot of the answers within Ask Perion, including the suggestion of how do you reallocate budgets in between platforms. If you just completed a campaign on different social platforms, it will suggest what's next, right? It would say, "I would put more money towards open web CTV, or Meta, or YouTube," or whatever it is. Outmax is becoming an even more integrated solution within our entire agentic platform and Ask Perion, obviously.

[Andrew Marok, Analyst at Raymond James]

All right, maybe one more if my audio will allow me. Can you talk a little bit about the trajectory for your medium-term goals, given the 2026 performance you're seeing so far? Are those still accessible for you, and what will the path to get there? Thank you.

[Tal Jacobson, CEO at Perion Network]

Andrew, I'm sorry, it's very hard hearing you, if you can repeat it for a second.

[Andrew Marok, Analyst at Raymond James]

Just talking about your medium-term goals and the 2026 performance so far, if you are still on track for the medium-term goals at the beginning of the year and the track on how to get there.

[Elad Tzubery, CFO at Perion Network]

Yeah, all right. I think, if you are looking at the H2 of 2026, first of all, we are starting right now to onboard some strategic agreements we had discussed about in Q1. They recently signed, we are seeing right now onboarding into our pipeline, and we see that all of our growth engines are continued to generate healthy pipeline as we are looking at Q3 and Q4, and looking at last year as well, when we see the ex-TAC and EBITDA had waited on the second half of the year, we feel that right now we have the right visibility to narrowing down a bit the guidance for the continuous of the year. Of course, taking into account everything that we already did in with respect to efficiency measure that took in Q1, we have the right visibility right now towards the second half of the year.

[Operator]

Thank you. Our next question comes from Jason Helfstein at Oppenheimer. Jason, you may now unmute your line and ask your question. Thank you.

[Jason Helfstein, Analyst at Oppenheimer]

Hey, everybody. Can you hear me okay?

[Tal Jacobson, CEO at Perion Network]

Yes.

[Elad Tzubery, CFO at Perion Network]

Yes.

[Elad Tzubery, CFO at Perion Network]

Thank you.

[Jason Helfstein, Analyst at Oppenheimer]

Great. Okay. Can you give us a little bit of help? Obviously, you're giving us kind of the spend for Perion One, but we don't know the revenue. I mean, obviously the other parts of the business are still having a negative mix shift because overall revenue is still down. Albeit you are guiding for a mid-teen-ish type of growth in the back half of the year. Just maybe help us understand how much was either Perion One revenue in the quarter or the non-Perion One revenue year-over-year declines.

[Jason Helfstein, Analyst at Oppenheimer]

That's question number one. Number two, would you think about perhaps changing the segment disclosure to revenue ex-TAC, since you're now guiding to revenue ex-TAC and not revenue, and maybe giving us that level of detail? Next question, you highlighted a RIF headcount reduction. I'm just curious if we can get some more details, like what percent of people, how many people or what percent did it that impact? Just lastly, with the $268 million of cash, should investors assume it entirely goes to buybacks or are there other M&A opportunities you're looking at? Thank you.

[Elad Tzubery, CFO at Perion Network]

Okay. Thank you, Andrew. I will start with the revenue. Jason, sorry. The revenue for Q2 for Perion One was $74.2 million. You have it, obviously, in the presentation, if you will, up again to the website. It did shows a slight decline year-over-year when you're looking at the revenue, but this is something that we were expecting as we onboard more customers into the Perion One. From a revenue recognition method, most of it will come on a net perspective, not necessarily as growth. We expected to see it this way.

[Elad Tzubery, CFO at Perion Network]

If we're looking at the segment and how we are breaking that down, it is important for us to really think about the spend and how we are contributing spend towards the different channel, because we believe that the real adoption of our solution towards our customers is really coming into place when you're looking at the spend level. It's more giving indication of the adoption of the customers. In the end, Perion One is a channel agnostic, so when we are contributing to different channels, it makes more sense to give it breaking down through the spend, and Perion One is the total number, which obviously supposed to produce the better ROI for the advertisers.

[Elad Tzubery, CFO at Perion Network]

From the reduction standpoint, as we discussed, I believe in starting last year, we are constantly doing improvements on how we are operating our business and improving our cost base to be more efficient, to be able to, first of all, of course, support all of this scale with the current cost base and improve wherever we can. In H1, we're very focused about also creating this operational leverage going into the second half of the year. We just announced right now the restructuring that we did. Roughly, I can tell you that we reduced roughly 10% of the cost base. It was intentionally made also to support the different fluctuation in the FX, also to give us some room to invest more when we are going into 2027.

[Elad Tzubery, CFO at Perion Network]

We want to hit the top line expansion that we are aiming to get and the growth rates to Perion One. Not everything will be making 2027 without even getting into the guidance right now for 2027. For a question with respect to the cash, we currently have almost $270 million in cash in our balance sheet. We are continuously trying to do, also looking at the buybacks. We expect to end the buyback, the current plan, by the end of the year. We are constantly also looking on M&A activities to see if there are any interesting opportunities out there that can generate more value to the Perion customers and to really increase our synergy dollars.

[Elad Tzubery, CFO at Perion Network]

Something very important to highlight on that, we're taking very disciplined approach when we are looking at our cash. We're always trying to see what will get the best value to our shareholders, whether this can be a buyback or an M&A or investing in our own business for the growth. We are always trying to balance between those three.

[Tal Jacobson, CEO at Perion Network]

Yeah. I'll just echo what Elad said and say, with our current cash, obviously buyback, we still have a hefty chunk to complete this year. We're investing in our technology, so all the growth engines, we're putting some investment there to make sure that they continue to grow and continue to outpace the market. We're constantly looking at M&A, but as you can see in the past two or three years, we've always been disciplined in buying the right things. With Hivestack, which is showing almost three years after, it's still showing amazing growth with Digital Out-of-Home. Reinvents with Outmax showing amazing growth. We're not running to just spend the money. We are looking for good opportunities, and when we find something that makes sense and is extremely synergetic and profitable, we can explore that.

[Operator]

Thank you. As a reminder, if you would like to ask a question and you are in the Zoom webinar, we ask that you please use the raise hand function at the bottom of your Zoom screen, or if you have dialed in, please press star nine. Our next question today comes from Matthew Weber at Canaccord. Matthew, you may now unmute your line and ask your question. Thank you.

[Matthew Weber, Analyst at Canaccord]

Hi. Great. Can you hear me okay?

[Tal Jacobson, CEO at Perion Network]

Yeah.

[Matthew Weber, Analyst at Canaccord]

Okay. Great. Thanks, guys. Just one for me. You talked about execution, recently signed agreements actively on the onboarding phase, you started ticking towards the end of Q3. Can you just talk about some of the factors that go into the pacing of those contributions and what could cause them to either exceed or to drive some variance relative to your expectations and those customers online? Thanks.

[Elad Tzubery, CFO at Perion Network]

Yes. Thank you, Matt, for your question. We gave a bit of color of those agreements, but it's basically a volume play, two of the very large agencies that operates. I can tell you that it took us a lot of time to do the onboarding and all of the testing phases, and the entire H1 we're focusing about showcase the Perion One capabilities and why it can drive better results for them and for their customers. Right now, we signed them. I think it will take a bit more time to do the onboarding phase, and then I believe that those contracts will be more materialized towards the end of Q3 and obviously towards Q4, and mostly can obviously in 2027 as well.

[Elad Tzubery, CFO at Perion Network]

It can be faster, and I want to be a bit careful about When you look at the few months of testing, even the onboarding can take more time, and it's something that they are controlling on. We are very capable to take any volume that they will decide to give us. There can be an upside on that, but it's not under our control, and that's why currently we still see a range in the ex-TAC level from those specific reasons and the fact that obviously the entire industry are very heavy on the second half of the year specifically towards Q4.

[Tal Jacobson, CEO at Perion Network]

Yeah. I'll just say again, to echo what Elad said, we spent H2 mainly showcasing how our technology can provide better outcomes than anything else to those two strategic clients that we have now. We're actually happy to know, it was a frustrating process to take so long to close those agreements, but the fact that the barrier for entry was so high gives us the confidence that our technology can provide great value, and that others are going to have a very high barrier to entry, which we're considering is a very good thing. We're feeling very optimistic about those two agreements, and we're now looking how do we duplicate that with other clients.

[Matthew Weber, Analyst at Canaccord]

Makes a lot of sense. Thank you.

[Operator]

Thank you. Our next question today comes from Jason Kreyer at Craig-Hallum Capital Group. Jason, you may now unmute your line and ask your question. Thank you.

[Jason Kreyer, Analyst at Craig-Hallum Capital Group]

Thank you. Can you guys unpack the commentary about the promotional activity on Perion One? It seems like there's maybe some take rate concessions up front that will moderate over time. I am just trying to understand how you migrate take rates to normalized levels and why there's more of an outsized impact in the near term.

[Tal Jacobson, CEO at Perion Network]

Yeah, absolutely. Thank you for the question. As we said, during H1, we ran a lot of test campaigns. Test campaigns come with very low margins. As their name suggests, it is tests. Now, again, as we close those two strategic agreements, obviously they are not going to stay at testing rates, that should be normalized. Going forward, even though we do think this is going to be normalized, we think testing budgets is a great tool for us to use to showcase our technology and gain market share. Our goal is to gain as much market share as possible, but obviously once we close those agreements and future agreements, we believe take rates will go back to normal.

[Elad Tzubery, CFO at Perion Network]

Just to add on what I've just said, already starting from the second half of the year, I believe that we are going to see the take rate to be a bit slightly increasing towards the second half of the year.

[Jason Kreyer, Analyst at Craig-Hallum Capital Group]

Thank you. As a follow-up, you guys had impressive growth across CTV and out-of-home and Retail Media. Can you just reconcile that to the [inaudible] growth that declined in the quarter, and when do you think the consolidated growth rates more closely align with these segments as opposed to kind of the legacy segments which are in decline? Thanks.

[Elad Tzubery, CFO at Perion Network]

I think it's not a secret that the web is driving it down. The entire industry is, we see budgets are shifting away from the open web and moving towards Digital Out-of-Home and CTV. Our solutions of Digital Out-of-Home and CTV are very much focusing most of them around self-serve, which increasing the take rate from what we used to sell in the past.

[Elad Tzubery, CFO at Perion Network]

Having said that, I think that our take rates are still very healthy when you're looking at total Perion One, and they were even relatively high when we're looking at it still, so it gives us some room for all of those promotional use that we discussed right now. When we are looking at the different channels, again, in our opinion, the best structural way to give it is on the spend then, because this is what really the discussion with the customers and showcase really the adoption of how much we are using the platform.

[Elad Tzubery, CFO at Perion Network]

The Perion One, usually it's a channel agnostic, and it's not something that under our control in terms of the take rate. We are of course controlling the overall take rate that we are expecting to get of certain campaign, but not necessarily about where the money will be deployed in which channel. I'm assuming also in ex-TAC we'll start to see more, it leans towards CTV and Digital Out-of-Home as well, and obviously, web will influence that, but I would not expect it to go relatively lower than the 20% rate that we see right now. As said, in H2 even, we're going to see a moderate increase.

[Jason Kreyer, Analyst at Craig-Hallum Capital Group]

Thank you.

[Operator]

Okay.

[Elad Tzubery, CFO at Perion Network]

Thank you.

[Operator]

Our final question today comes from Eric Martinuzzi at Lake Street. Eric, you may now unmute your line and ask your question. Thank you.

[Eric Martinuzzi, Analyst at Lake Street]

Curious to know the repeat customers that are using Outmax. Are you seeing larger spend on subsequent campaigns?

[Elad Tzubery, CFO at Perion Network]

Yes. Thank you. I think the interesting thing about Outmax, specifically, it's a great product for the land and expand model. The majority of our clients that are using it started from small budgets, and now they're growing quarter-over-quarter within the same account. Since Outmax is outcome-driven, it can show actual business results for our clients. It's a very natural land and expand type of model with the majority of our clients of Outmax.

[Eric Martinuzzi, Analyst at Lake Street]

I noticed in your guidance, you lowered the midpoint for the contribution ex-TAC for 2026. Was this a result of a slower-than-expected ramping of these two large strategic accounts?

[Elad Tzubery, CFO at Perion Network]

Yes, Eric. I think that, first of all, our initial expectation was that this onboarding and those agreements would be signed earlier in the year, and we would be able to see more growth out of them. Also factoring all of the macro headwinds that we saw in H1, we had better visibility to see where we are. The reduce of the ex-TAC, narrowing down to the low end was actually because those two main factors.

[Eric Martinuzzi, Analyst at Lake Street]

I did note that you reiterated the midpoint on the adjusted EBITDA, that was good to see.

[Elad Tzubery, CFO at Perion Network]

Yes. Thank you.

[Eric Martinuzzi, Analyst at Lake Street]

Thank you.

[Elad Tzubery, CFO at Perion Network]

Thank you, Eric.

[Operator]

This concludes today's Q&A. I'll now hand back to management for any closing remarks. Thank you.

[Tal Jacobson, CEO at Perion Network]

Thank you. Thank you all for joining. Perion One adoption is accelerating across every growth engine, and we're entering the second half with clear momentum. We look forward to updating you in the next quarter. Thank you for your time.

[Operator]

This concludes today's call. Thank you everyone for joining. You may now disconnect.

Participants

Executives

• Tal Jacobson, CEO
• Elad Tzubery, CFO

Analysts

• Andrew Marok, Analyst at Raymond James
• Jason Helfstein, Analyst at Oppenheimer
• Matthew Weber, Analyst at Canaccord
• Jason Kreyer, Analyst at Craig-Hallum Capital Group
• Eric Martinuzzi, Analyst at Lake Street