Doron GerstelCEO
GLOBAL AD TECH COMPANY:FOR BRANDS & PUBLISHERSPowered by technology. Enriched by data
This presentation contains historical information and forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995with respect to the business, financial condition and results of operations of Perion. The words “will”, “believe,” “expect,” “intend,” “plan,” “should” and similarexpressions are intended to identify forward-looking statements. Such statements reflect the current views, assumptions and expectations of Perion withrespect to future events and are subject to risks and uncertainties. Many factors could cause the actual results, performance or achievements of Perion to bematerially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, or financialinformation, including, among others, the failure to realize the anticipated benefits of companies and businesses we acquired and may acquire in the future,risks entailed in integrating the companies and businesses we acquire, including employee retention and customer acceptance; the risk that such transactionswill divert management and other resources from the ongoing operations of the business or otherwise disrupt the conduct of those businesses, potentiallitigation associated with such transactions, and general risks associated with the business of Perion including intense and frequent changes in the markets inwhich the businesses operate and in general economic and business conditions, loss of key customers, unpredictable sales cycles, competitive pressures,market acceptance of new products, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, whetherreferenced or not referenced in this presentation . Various other risks and uncertainties may affect Perion and its results of operations, as described in reportsfiled by the Company with the Securities and Exchange Commission from time to time, including its annual report on Form 20-F for the year ended December31, 2016 filed with the SEC on March 7, 2017. Perion does not assume any obligation to update these forward-looking statements.
FORWARD LOOKING STATEMENTS
Non-GAAP financial measures, including adjusted EBITDA, consist of GAAP financial measures adjusted to exclude acquisition related expenses, other non-recurring expenses, share-based compensation expenses, accretion and gain from the reversal of acquisition related contingent consideration, impairment ofgoodwill, amortization and impairment of acquired intangible assets and the related taxes thereon, as well as certain accounting entries under the businesscombination accounting rules that require us to recognize a legal performance obligation related to revenue arrangements of an acquired entity based on itsfair value at the date of acquisition. The purpose of such adjustments is to give an indication of our performance exclusive of non-cash charges and other itemsthat are considered by management to be outside of our core operating results. These non-GAAP measures are among the primary factors management usesin planning for and forecasting future periods. Furthermore, the non-GAAP measures are regularly used internally to understand, manage and evaluate ourbusiness and make operating decisions, and we believe that they are useful to investors as a consistent and comparable measure of the ongoing performanceof our business. However, our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, andshould be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Additionally, these non-GAAP financialmeasures may differmaterially from the non-GAAP financial measures used by other companies.
NON-GAAP MEASURES
1. Perion Facts2. Investment Highlights3. Company Evolution4. Powering Organic Growth5. Business Growth Indicators6. Search & Bing7. Comparable8. Key Takeaways9. Questions
Proprietary| NASDAQ: PERI
PERION FACTS
• Founded in 1999• Publicly listed 2006 (NASDAQ), 2007
(TASE)• Acquired Undertone in 2015• 500+ employees with main offices in
New York and Tel Aviv• Primary Sales offices: Chicago,
London, Paris• Sales Presence: Los Angeles, Boston,
Washington DC, Atlanta, Toronto, Dusseldorf, Hamburg, Barcelona
• Development offices: Tel Aviv, San Francisco, Buenos Aires
Proprietary| NASDAQ: PERI
INVESTMENT HIGHLIGHTS
$312.8M
2016 EBITDA
$45.4M
Complete Solutions For Advertisers & Publishers
2016 Cash Flow
$33.8M
from continuing operations 2016 Revenue
150+ Fortune 500 companies
A leader in Bing Search Distribution
#1 FacebookMedia Partner
in Europe
• Market leader in digital advertising and search distribution
• Profitable for 10+ years
• Strong partnerships with
Proprietary| NASDAQ: PERI
• Organic Growth• Advertising: accelerate transformation to full funnel solutions• Search: long term renewal with Bing in progress featuring expansion into adjacent products• Synergies: leverage relevant assets and opportunities• Talent: Mike Glover joins Perion as new search leader
• Differentiated Technology• Product: invest in world-class advertising and search capabilities• Engineering: focus on data infrastructure, customer insights, business intelligence• Partnerships: reduce capital commitment through selective alliances• Talent: Chris Henger promoted to global product leader
• Optimized Cost Structure• G&A: more efficient operating support • Media: drive economics of scale • Talent: Ophir Yakovian joins Perion as CFO
KEY PRIORITIES & ACTIVITES
Proprietary| NASDAQ: PERI
2001 2005 2009
Rise of Display Ad Networks
COMPANY EVOLUTION
2003 200720042002 2006 2008
“Undertone Networks”Founded
Undertone Brand & Quality
Focus
Undertone Brand & Quality Network
1999
Perionfounded as
“Incredimail”
2000
Expand Consumer Apps Portfolio
Data-Driven Solutions
2013 2017 2011 20122010 2015 20162014
Exchanges, DSPs, & Mobile Networks Founded
M&A Period
Mobile Solutions
Proprietary Ad Format Development
Programmatic & SocialEnablement
Intent Data and Machine Learning
Search DistributionConsolidation
Proprietary| NASDAQ: PERI
HISTORICAL DIGITAL ADVERTISING FUNNEL
Search & Social Advertising
Brand AdvertisingAwareness
Consideration
Intent
Purchase
Proprietary| NASDAQ: PERI
FUNNEL SILOS STARTING TO CONVERGE
• High Impact
• Data-driven
• Great Creative
• Social Enabled
• Linked Capabilities
• Sophisticated Tech
• Programmatic
Awareness
Consideration
Intent
Purchase
Proprietary| NASDAQ: PERI
KEY ASSETS POWER ORGANIC GROWTHLeveraging our integrated assets to drive long term growth and unlock sustainable shareholder value
• Diversified cross-screen media and technology platform
Search Distribution
• Free cash flow enabling investment in organic growth
Data & Intent
• Enhanced campaign performance, search growth, and operational efficiency
Quality Brand
Advertising Solutions
Proprietary| NASDAQ: PERI
DATA IS OUR ‘GLUE’
Business Results
Intelligence Layer
Data Engine
Better Products
Identified Synergies
Enhanced Performance
Operational Efficiencies
Intent Data
CreativeProfiles
EngagementSignals
AudienceSegments
Automated Insights
AdvancedData Science
SophisticatedBusiness Analytics
Proprietary| NASDAQ: PERI
BROADENING AND DEEPENING CUSTOMER RELATIONSHIPS TO INCREASE WALLET SHARE AND DRIVE GROWTH
Brand Advertising
• Expand business with global & local agency partners
• Increase incremental campaign spend through superior performance and service
Social
• Expand social offering with new channels and partnerships
• Add capabilities like Facebook Canvas, video content, and influencers to capture additional social budgets
Search
• Better optimize RPM through machine learning
• Extend into mobile to build deeper partnerships with publishers
Proprietary| NASDAQ: PERI
PHARMACEUTICAL TECH/TELECOMFIN SERVICES RETAILCPGAUTO
SERVING THE WORLD’S BEST BRANDS ACROSS ALL VERTICALS
Proprietary| NASDAQ: PERI
Engaging Video Storytelling Drives Purchase Intent for Puffs
10%Lift in Purchase Intent
CTR 36X Industry Rich Media
Benchmark1
Sexy, But Simple Car Imagery Sells 11,000+ Cars for BMW
11,310 Vehicles Purchased
21 seconds Interaction Time
Fun, Unexpected Creative Drives Site Visits for Garmin
635% Lift in Unique Site Visitors
389% Lift in Number of Site Visits
DELIVERING STRONG BUSINESS OUTCOMES …
173%Lift in Store Visits
178% Lift in Site Visits
Appealing Image Gallery Drives Consumers to Raymour & Flanigan
Sources: Sizmek1
Proprietary| NASDAQ: PERI
60%
30%
0%
90%
45%
0%
3%
1.5%
0%
50%
25%
0%
… THROUGH HIGH PERFORMING CAMPAIGNS
38%
58% 85%
30%
*MOAT benchmark; *the ratio of those that converted from hovering to interactingSources: IPSOS; Sizmek 2015 Databook; Undertone 2016 Benchmarks
2.97%
.22%
34%
.98%
IPSOS Recall/Standard vs. Undertone HI
MOAT/Standard vs Undertone HI
Sizmek/RM vs Undertone HI
Sizmek/RM vs Undertone HI
EngagementAwareness Attention* CTR
Industry Undertone Industry Undertone Industry Undertone Industry Undertone
Proprietary| NASDAQ: PERISource: Undertone Data, Google Insights, IAS, MOAT; UDMS 2016 Benchmarks;Based on Undertone Page Grabber and Standard 300 x 250
86%Lower Cost Per Click
50% Lower Cost Per Engagement
$1.00
$7.14
$10.00
$5.00
0
$.20
$.10
0
$.10
$.20
Industry Undertone Industry Undertone
… WITH ATTRACTIVE RETURN ON INVESTMENT
Proprietary| NASDAQ: PERI
UNDERTONE GROWTH STRATEGY• Provide Full Funnel Creative Digital Media Solutions
• Powered by technology• Enriched by data• Supported by service excellence
• Concentrate On Growth Categories Most Important To Brands• Mobile• Video• Social• Programmatic
• Value Creation For Brands, Agencies, And Media Partners
NASDAQ: PERI
Consumers
Proprietary Technology Platform
Exclusive Media Placements
Brands
Award WinningCreative
NASDAQ: PERI
Proprietary| NASDAQ: PERI
• Achieving stability and growth alongside market changes• Fully compliant with market regulations• Cash flow to augment investments in our growth businesses
LEADING SEARCH SYNDICATION PLAYER WITH HIGH PROFITABILITY
Perion analysisBluCora/ InfoSpace was acquired on July 2016
Public And Private Competitors Solid long-term partnership with
Proprietary| NASDAQ: PERI
LEVERAGING SYNDICATION SUCCESS TO GAIN MARKET SHARE
$104 $136
$76 $24
2015 2016
Syndication Tail & Other
• Decrease in expense-free search revenues generated from legacy users
• Increase in Search Syndication business
Proprietary| NASDAQ: PERI
KEY TAKEAWAYS
Provide a full funnel creative digital media solutions for brands, agencies & media partners
Proprietary Technology
Our integrated assets to drive long-term growth & unlock shareholder value
Complete Solutions
Optimized Cost Structure
G&A: more efficient operating support Media: drive economics of scale
Organic Growth
150+ Fortune 500 companies
A leader in Bing Search Distribution
#1 FacebookMedia Partner in Europe
Strong partnerships with
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