Perion Network Slashes Q2, FY24 Outlook Amid Microsoft Bing Ad Pricing Changes, Stock Tumbles

Perion Network Ltd. PERI shares are trading lower after the company lowered its second-quarter and FY24 financial guidance.

Outlook: Perion cut its second-quarter revenue guidance to $106 million – $108 million (vs. consensus $120.035 million) from $118 million – $122 million.

The company also slashed its second-quarter adjusted EBITDA outlook to $6.5 million – $7.5 million (from $10 million – $12 million).

Moreover, the company reduced the FY24 revenue forecast from $590 million – $610 million to $490 million – $510 million (vs. the consensus of $601.005 million) and adjusted EBITDA to $48 million – $52 million from $78 million – $82 million earlier.

The company reduced the guidance due to changes in Microsoft Corporation MSFT Bing advertising pricing and a decline in revenue from standard video and display formats.

Apart from this, Perion experienced a recent decrease in revenue from standard video and display formats owing to market conditions and a shift towards higher premium formats, which promise advertisers greater ROI.

In recent days, Perion was notified by Microsoft Bing of its decision to exclude several publishers from its search distribution marketplace.

In addition to the changes in advertising pricing and mechanisms implemented by Microsoft Bing during the first quarter of 2024, search revenue from its agreement with Microsoft Bing is expected to represent less than 5% of Perion’s revenue in the second half of 2024.

“The recent changes Microsoft Bing implemented to its Search distribution marketplace are unfortunate and significantly impacted our Search Advertising business,” commented Tal Jacobson,” Perion’s CEO.

“Perion remains committed to expanding our AI-driven Advertising Solutions business through product innovation and partnerships. Specifically, we are focused on expanding our growth engines into more countries, including CTV, Retail Media, and programmatic Digital out-of-home (DOOH). These represent a big opportunity for Perion due to their size and growth rate worldwide.”

Price Action: PERI shares are down 24.4% at $9.31 premarket at the last check Monday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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