Confidential 2 Forward Looking Statements This presentation contains historical information and forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 with respect to the business, financial condition and results of operations of Perion. The words will, believe, expect, intend, plan, should and similar expressions are intended to identify forward-looking statements. Such statements reflect the current views, assumptions and expectations of Perion with respect to future events and are subject to risks and uncertainties. Many factors could cause the actual results, performance or achievements of Perion to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, or financial information, including, among others, the failure to realize the anticipated benefits of the ClientConnect transaction; risks entailed in integrating the ClientConnect business with Perions other businesses, including employee retention and customer acceptance; the risk that the transaction will divert management and other resources from the ongoing operations of the two businesses or otherwise disrupt the conduct of those businesses, potential litigation associated with the transaction, and general risks associated with the business of Perion and with the ClientConnect business, including changes in the markets in which 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, whether referenced or not referenced in this presentation. Various other risks and uncertainties may affect Perion and its results of operations, as described in reports filed 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 December 31, 2013 and the report on Form 6-K filed with the SEC on September 23, 2014. Perion does not assume any obligation to update these forward-looking statements.
Confidential 3 Use of Non-GAAP measures Non-GAAP financial measures, as well as adjusted EBITDA, consist of GAAP financial measures adjusted to include the results of discontinued operations, and to exclude acquisition related expenses, share-based compensation expenses, amortization of acquired intangible assets and non-recurring tax expenses, as well as certain accounting entries that are required under the business combination accounting rules. The purpose of such adjustments is to give an indication of our performance exclusive of non-cash charges and other items that are considered by management to be outside of our core operating results. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Furthermore, the non-GAAP measures are regularly used internally to understand, manage and evaluate our business and make operating decisions, and we believe that they are useful to investors as a consistent and comparable measure of the ongoing performance of our business. However, our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies. A reconciliation between results on a GAAP and non-GAAP basis is provided in the Appendix of this presentation.
Confidential 4 Perions Mission and Strategy A leading search and display advertising monetization platform providing cash flow to fuel future growth Aggregated mobile media buying and retargeting platform, providing software developers the best ROI Continued innovation and a strong acquisition pipeline that will accelerate execution of our vision, driving future growth Perion is a leading performance based cross device technology marketing company
Confidential Perions Management Team 5 Josef Mandelbaum CEO 20+ years experience, former CEO of American Greetings Interactive Yacov Kaufman CFO 20+ years experience Acorn Energy, Tower Semiconductor Shai Gottesdiener General Manager, Mobile 15+ years management experience in Internet companies Limor Gershony General Counsel 15+ years experience Veraz Networks, Medigate Dana Maor SVP Human Resources 15+ years experience Frutarom, Radvision Strong M&A background Miki Kolko CTO 20 years experience in Internet and Big Data tech Former founder and CTO of 3 startups Amir Nahmias General Manager Codefuel 15+ years experience in the software and content industry Yuval Hamudot General Manager Consumer Apps 15+ years experience in R&D product development
We offer our partners a range of innovative and reliable monetization solutions including: Search based monetization tool, offering higher LTV and conversion rates than traditional monetization tools Customizable installer offering targeted secondary offers and advanced installer technology. Targeted display ads Robust analytics system enabling real time, easy access to campaign data and immediate optimization. One of the industry leaders with over 300M monthly queries in the US representing approximately 2% share of the US market Long term relationship with Bing since 2010 New 3+1 year contract from Jan 2015 Perion represents approximately 10% of Bing searches Perion has long-term partnerships with all the main search engines (Google, Yahoo, Bing, Ask) 7 Perions Monetization Platform 250M End-users worldwide 50M+ Top performing ads served daily 20% Avg rise in rev per install 100+ Countries in our ad network
Confidential 8 Pushing through the Headwinds Industry wide policy changes by search and browser providers and anti-virus companies are adversely impacting our monetization business and ability to forecast the future Causing decreasing revenues through 2014 and expected to continue into 2015 Executing in a Challenging Environment: Implemented a cost savings program to maintain margins Controlling customer acquisition spend, maximizing RoI and growing cash position for future investment Developing new monetization products to return to growth Focus on increasing market share in a smaller market Accelerate development and marketing of mobile offering
Confidential 9 Transitioning into Mobile Performance Advertising GrowMobile by Perion, an aggregated mobile media buying and retargeting platform
Confidential A Booming but Still Nascent Market 10 Mobile is the fastest-growing digital ad medium US mobile ad revenue will top nearly $42B in 2018 - 5-year CAR of 43% from 2013 The games vertical reached revenue of $25 billion in 2014 Material upside: ad spending still has to catch up with consumer time spent on mobile media Market still immature, leading to inefficiencies and room for improvement and automation
Confidential A Very Fragmented Environment 11 Vast amounts of ad space across millions of mobile apps, websites and games. Many ways to buy media (RTB ad exchanges, ad networks Google, Facebook etc.) Numerous types of ads (display, video, etc.) Countless traffic sources Various campaign and user-acquisition strategies Technical integration required with each traffic source >> Unorganized, time and resource consuming >> Ongoing administrative and manual hassles X100X20 Your Ad
Confidential Making Measurement and Optimization Challenging 12 Inefficient campaign measurement No equivalent of cookies on mobile Data about cost, campaign performance, usage, and revenue are in different systems: Revenue from attribution tracking partner Cost from ad network Install numbers from internal systems No real time data Lack of retargeting tools Huge amount of time on manual reconciliation of reports. Cost Installs Data Device
Confidential Introducing 13 Simplifying mobile media buying: Aggregates hundreds of networks and exchanges in real time, through one Insertion Order Tracking and attribution: Single lightweight, open sourced SDK integration to instantly plug into 100+ ad networks, exchanges and direct publishers. Robust Analytics: Cost, campaign performance, usage, and revenue data for all traffic sources and all your campaigns in one easy-to-read dashboard. Intelligence Benchmark: Leverage algorithmic learning to optimize predictive analysis A mobile advertising platform that provides aggregated, programmatic mobile media buying, measurement and performance analytics.
Confidential Recent Launch of GrowMobile Self-Serve 14 First cross-network, self-serve mobile advertising platform, offering aggregated access and programmatic mobile media buying measurement, analysis and optimization from a single dashboard Beta version launched at the Appworld conference in November 2014 Full launch expected by end of Q1 2015
Confidential Client Segmentation 15 How is User Acquisition managed? Small Players (with some exceptions) Ex: Pixelberry Mobile Marketing Agencies Ex: Fetch Medium to Big Players Ex: Glu Through an internal User Acqu