In recent events, both the market and analysts responded negatively to the latest earnings report from the adtech company Perion Network. As compiled by S&P Global Market Intelligence, the company’s stock price decreased by nearly 13% this week.
Falling Short on Top-line Guidance
On Wednesday, Perion Network released its fourth-quarter and full-year 2024 financial results. The company’s total sales for the quarter saw a year-over-year decline of nearly 45%, although they slightly exceeded analyst expectations, reaching $129.6 million. The company’s revenue from search advertising experienced a significant drop of 78%, amounting to $25.5 million. Meanwhile, its advertising solutions segment faced a 13% decline, bringing in just over $104 million.
Further analyzing the financials, Perion’s non-GAAP (adjusted) net income fell sharply by 70% to approximately $16 million, or $0.33 per share. Despite the significant decrease, this figure managed to surpass the consensus estimates from analysts.
However, concerns arose with the company’s full-year 2025 revenue guidance. Perion projected revenue between $400 million and $420 million, while analysts projected a higher figure close to $469 million.
Navigating a Challenging Environment
Following the earnings announcement, analyst Eric Martinuzzi from Lake Street Capital Markets revised his price target for Perion’s shares, reducing it from $11 to $10.50. He maintained a buy recommendation despite the adjustment.
The current media landscape presents challenges for companies reliant on advertising revenue to maintain consistent growth. Perion Network’s recent performance issues highlight the difficulties faced, and the management will need to strategize effectively to reassure investors and achieve a turnaround in financial performance.
