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Perion's (PERI) Vidazoo Buyout to Strengthen Video Ad Business
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Perion Network (PERI - Free Report) recently announced the acquisition of Vidazoo for $93.5 million. The company paid $35 million in cash upon closing and the rest $58.5 million will be paid upon achieving the EBITDA target of $32.4 million by the end of 2023.
The deal expands Perion’s growing video advertising business. The addition of Vidazoo will help the company in offering more value to customers as it gets access to direct video ad supply. Elimination of intermediaries will reduce media costs and increase operating efficiency.
Vidazoo is immediately accretive for Perion. The company generated revenues of $31.9 million in 2020 and is expected to generate $45 million in 2021, reflecting 41% year-over-year growth. Moreover, adjusted EBITDA is expected to surge 86% year over year to $8 million in 2021.
The deal will also expand Perion’s publisher base as Vidazoo serves 1000 publishers worldwide. Vidazoo’s online video player (OVP) and integrated ad server allow publishers and brands to upload, manage and stream video content.
Perion Network Ltd Price, Consensus and EPS Surprise
Vidazzo’s OVP is certified with the major advertising platforms and compatible with all devices and video formats. The company generates more than 80% of revenues from U.S. advertisers and users.
Perion Raises 2021 and 2022 Guidance
Thanks to the Vidazoo acquisition, Perion raised its 2021 and 2022 guidance. Shares rallied 5.7% to close at $19 on Oct 4. Perion has returned 49.3% year to date against the Zacks Internet Content industry’s decline of 7.5%.
The company now expects 2021 revenues between $430 million and $445 million compared with the previous guidance of $415-$430 million. Revenues are expected to grow 33% over the reported figure in 2020.
For 2021, adjusted EBITDA is expected in the $52-$53 million range compared with the previous $50-51 million guidance. At mid-point, adjusted EBITDA is expected to grow 60% over the reported figure in 2020.
For 2022, Perion expects 2021 revenues between $545 million and $575 million, compared with the previous guidance of $490-$520 million. Revenues are expected to grow 29% over the estimated figure in 2021. Adjusted EBITDA is expected in the $68-$53 million range compared with the previous guidance of $59-62 million, suggesting 33% growth over the estimated 2021 figure.
Perion is riding on strong advertising revenue growth. In second-quarter 2021, display and social advertising revenues surged 211%, primarily due to the contribution of video and CTV advertising contracts. Video, including CTV, generated $9.1 million in revenues, reflecting 435% growth year over year.
Recovery in advertiser spending and a spike in e-commerce-related ad-spending are the key catalysts for this company. Perion is also expected to benefit from the robust performance of its Search business, driven by strong advertiser demand and the partnership with Microsoft’s (MSFT - Free Report) Bing.
Image: Bigstock
Perion's (PERI) Vidazoo Buyout to Strengthen Video Ad Business
Perion Network (PERI - Free Report) recently announced the acquisition of Vidazoo for $93.5 million. The company paid $35 million in cash upon closing and the rest $58.5 million will be paid upon achieving the EBITDA target of $32.4 million by the end of 2023.
The deal expands Perion’s growing video advertising business. The addition of Vidazoo will help the company in offering more value to customers as it gets access to direct video ad supply. Elimination of intermediaries will reduce media costs and increase operating efficiency.
Vidazoo is immediately accretive for Perion. The company generated revenues of $31.9 million in 2020 and is expected to generate $45 million in 2021, reflecting 41% year-over-year growth. Moreover, adjusted EBITDA is expected to surge 86% year over year to $8 million in 2021.
The deal will also expand Perion’s publisher base as Vidazoo serves 1000 publishers worldwide. Vidazoo’s online video player (OVP) and integrated ad server allow publishers and brands to upload, manage and stream video content.
Perion Network Ltd Price, Consensus and EPS Surprise
Perion Network Ltd price-consensus-eps-surprise-chart | Perion Network Ltd Quote
Vidazzo’s OVP is certified with the major advertising platforms and compatible with all devices and video formats. The company generates more than 80% of revenues from U.S. advertisers and users.
Perion Raises 2021 and 2022 Guidance
Thanks to the Vidazoo acquisition, Perion raised its 2021 and 2022 guidance. Shares rallied 5.7% to close at $19 on Oct 4. Perion has returned 49.3% year to date against the Zacks Internet Content industry’s decline of 7.5%.
The company now expects 2021 revenues between $430 million and $445 million compared with the previous guidance of $415-$430 million. Revenues are expected to grow 33% over the reported figure in 2020.
For 2021, adjusted EBITDA is expected in the $52-$53 million range compared with the previous $50-51 million guidance. At mid-point, adjusted EBITDA is expected to grow 60% over the reported figure in 2020.
For 2022, Perion expects 2021 revenues between $545 million and $575 million, compared with the previous guidance of $490-$520 million. Revenues are expected to grow 29% over the estimated figure in 2021. Adjusted EBITDA is expected in the $68-$53 million range compared with the previous guidance of $59-62 million, suggesting 33% growth over the estimated 2021 figure.
Perion is riding on strong advertising revenue growth. In second-quarter 2021, display and social advertising revenues surged 211%, primarily due to the contribution of video and CTV advertising contracts. Video, including CTV, generated $9.1 million in revenues, reflecting 435% growth year over year.
Recovery in advertiser spending and a spike in e-commerce-related ad-spending are the key catalysts for this company. Perion is also expected to benefit from the robust performance of its Search business, driven by strong advertiser demand and the partnership with Microsoft’s (MSFT - Free Report) Bing.
Zacks Rank & Stocks to Consider
Perion currently has a Zacks Rank #3 (Hold).
Shutterstock (SSTK - Free Report) and ironSource are better-ranked stocks in the same industry. Both the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term earnings growth rate for Shutterstock and ironSource is pegged at 13.2% and 40%, respectively.