Perion Network NASDAQ: PERI reported second-quarter results marked by growth in its Perion One platform and newer advertising channels, while overall revenue and contribution ex-TAC declined amid continued softness in open-web advertising and promotional pricing for customer acquisition.
Chief Executive Officer Tal Jacobson said the company’s strategy has centered on diversifying away from the open web and building its capabilities in connected TV, retail media and digital out-of-home advertising. He said those channels outpaced the broader market during the quarter, while the company’s Outmax AI agent recorded triple-digit year-over-year spend growth.
Total spend increased 9% year over year to $194.7 million in the second quarter. Spend on Perion One, the company’s unified advertising platform, rose 15% to $156.7 million and represented 80% of total spend, compared with 76% a year earlier.
Growth Engines Outpace Legacy Advertising Segments
Chief Financial Officer Elad Tzubery said CTV spend grew 56% year over year to $17.7 million, while digital out-of-home spend increased 45% to $87.7 million. Retail media spend rose 60% to $59.4 million. Outmax spend increased 136% year over year on a pro forma basis, according to the company.
Those gains were partly offset by ongoing weakness in open-web advertising. Revenue fell 5% year over year to $98.2 million, while total contribution ex-TAC declined 11% to $42.3 million. Perion One contribution ex-TAC was $34.9 million, down 4% from the prior-year period, but accounted for 83% of total contribution ex-TAC, up from 76% a year earlier.
Tzubery attributed the decline in Perion One contribution ex-TAC primarily to promotional terms used to win new accounts and increase spending from existing customers. During the question-and-answer session, Jacobson said the company conducted a number of test campaigns during the first half that carried low margins. Management expects take rates to normalize over time and modestly improve in the second half of 2026.
Search revenue declined 2% year over year, while search contribution ex-TAC fell 30%. Tzubery said Perion continues to manage the search business to maximize cash flow for reinvestment in Perion One and shareholder returns.
Profitability, Cash Position and Buybacks
Adjusted EBITDA was $2.8 million, representing 7% of contribution ex-TAC. The result included a $1.6 million foreign-exchange headwind; excluding that impact, adjusted EBITDA would have been $4.4 million, Tzubery said.
On a GAAP basis, Perion posted a net loss of $6.8 million, or $0.18 per diluted share. On a non-GAAP basis, the company reported net income of $3.9 million, or $0.09 per diluted share. Tzubery said the increase in the GAAP net loss was driven primarily by foreign-exchange effects in non-operating finance income and lower interest income from the company’s cash balance.
Net cash from operating activities totaled $2.5 million during the quarter, while adjusted free cash flow was $4.8 million. As of June 30, Perion had $268 million in cash equivalents, short-term bank deposits and marketable securities, with no debt.
The company repurchased 2.7 million shares for $24.5 million during the quarter, at an average price of $9.12 per share. Since launching the buyback program nine quarters ago, Perion has repurchased 18 million shares for $166.8 million. Management said it plans to complete the remaining $33.2 million under the current authorization by year-end.
Retail Media, AI and Distribution Initiatives
Perion highlighted several commercial and technology initiatives during the quarter. Best Buy Canada selected the company as its end-to-end in-store retail media technology partner for its digital signage network. Perion said its ad server, supply-side platform and header-bidding technologies will support a shift from fixed-loop signage to programmatic retail media buying.
The company also added programmatic guaranteed digital out-of-home deal execution within Google’s DV360 media platform. Perion said the capability covers more than 1.6 million screens in over 40 countries and is intended to allow buyers to access its digital out-of-home inventory through their existing workflow.
In addition, Perion partnered with Acrossmedia241 to bring Outmax to Greece and Central and Eastern Europe. Jacobson said the partner-led distribution model is designed to extend the company’s reach with low incremental costs. The company also added access to Fetch purchase-intelligence data through LiveRamp, providing advertisers with verified SKU-level purchase data sourced from more than 13 million monthly active users and over 26,000 merchants.
Perion introduced “Ask Perion,” a conversational self-service application within Perion One. Jacobson said the tool is integrated with Outmax and can provide recommendations on budget allocations across advertising platforms and channels.
2026 Outlook Narrowed
Perion narrowed its full-year 2026 outlook, projecting contribution ex-TAC of $215 million to $225 million and adjusted EBITDA of $51 million to $53 million. The adjusted EBITDA range implies a 24% margin at the midpoint.
Tzubery said the contribution ex-TAC outlook reflects a softer first half, including slower-than-expected timing for the signing and onboarding of two large strategic agency agreements. Management expects the agreements to begin making a more material contribution toward the end of the third quarter and accelerate in the fourth quarter and beyond.
The company also said targeted efficiency initiatives implemented at the end of the second quarter are expected to support an improvement in adjusted EBITDA margin during the second half. Tzubery said Perion reduced roughly 10% of its cost base as part of its restructuring and efficiency measures.
Jacobson said the company remains focused on expanding Perion One adoption, investing in its growth engines and selectively evaluating merger-and-acquisition opportunities alongside share repurchases and internal investment.
About Perion Network (NASDAQ:PERI)
Perion Network Ltd. 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.
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