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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Perion Network Ltd | NASDAQ:PERI | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.05 | 0.59% | 8.52 | 8.51 | 8.61 | 339 | 13:00:11 |
Exhibit No.
|
Description
|
|
|
|
|
|
|
101
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets, ii) Interim Consolidated Statements of Income (Loss), (iii) Interim Consolidated Statements of Comprehensive Income (Loss); (iv) Interim Consolidated Statements of Changes in Shareholders' Equity, (v) Interim Consolidated Statements of Cash Flows, and (vi) the Notes to Interim Consolidated Financial Statements
|
|
PERION NETWORK LTD.
By: /s/ Maoz Sigron
Name: Maoz Sigron
Title: Chief Financial Officer
|
Page | |
F-1 | |
F-2 | |
F-3 | |
F-4 | |
F-5 | |
F-7 |
June 30,
|
December 31,
|
|||||||
2023
|
2022
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Restricted cash
|
|
|
||||||
Short-term bank deposits
|
|
|
||||||
Marketable securities
|
|
|
||||||
Accounts receivable (net of allowance of $
|
|
|
||||||
Prepaid expenses and other current assets
|
|
|
||||||
Total Current Assets
|
|
|
||||||
Long-Term Assets
|
||||||||
Property and equipment, net
|
|
|
||||||
Operating lease right-of-use assets
|
|
|
||||||
Intangible assets, net
|
|
|
||||||
Goodwill
|
|
|
||||||
Deferred taxes
|
|
|
||||||
Other assets
|
|
|
||||||
Total Long-Term Assets
|
|
|
||||||
Total Assets
|
$
|
|
$
|
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$
|
|
$
|
|
||||
Accrued expenses and other liabilities
|
|
|
||||||
Short-term operating lease liability
|
|
|
||||||
Deferred revenue
|
|
|
||||||
Short-term payment obligation related to acquisitions
|
|
|
||||||
Total Current Liabilities
|
|
|
||||||
Long-Term Liabilities
|
||||||||
Payment obligation related to acquisition
|
|
|
||||||
Long-term operating lease liability
|
|
|
||||||
Other long-term liabilities
|
|
|
||||||
Total Long-Term Liabilities
|
|
|
||||||
Total Liabilities
|
|
|
||||||
Commitments and Contingencies
|
||||||||
Shareholders' equity
|
||||||||
Ordinary shares of ILS
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Treasury shares at cost (
|
(
|
)
|
(
|
)
|
||||
Accumulated other comprehensive loss
|
(
|
)
|
(
|
)
|
||||
Retained earnings
|
|
|
||||||
Total Shareholders' Equity
|
|
|
||||||
Total Liabilities and Shareholders' Equity
|
$
|
|
$
|
|
Six months ended
|
||||||||
June 30,
|
||||||||
2023
|
2022
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Revenue
|
||||||||
Display Advertising
|
$
|
|
$
|
|
||||
Search Advertising
|
|
|
||||||
Total Revenue
|
|
|
||||||
Costs and Expenses
|
||||||||
Cost of revenue
|
|
|
||||||
Traffic acquisition costs and media buy
|
|
|
||||||
Research and development
|
|
|
||||||
Selling and marketing
|
|
|
||||||
General and administrative
|
|
|
||||||
Changes in fair value of contingent consideration
|
|
|
||||||
Depreciation and amortization
|
|
|
||||||
Total Costs and Expenses
|
|
|
||||||
Income from Operations
|
|
|
||||||
Financial income, net
|
|
|
||||||
Income before Taxes on income
|
|
|
||||||
Taxes on income
|
|
|
||||||
Net Income
|
$
|
|
$
|
|
||||
Net Earnings per Share
|
||||||||
Basic
|
$
|
|
$
|
|
||||
Diluted
|
$
|
|
$
|
|
||||
Weighted average number of shares
|
||||||||
Basic
|
|
|
||||||
Diluted
|
|
|
Six months ended June 30,
|
||||||||
2023
|
2022
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Net Income
|
$
|
|
$
|
|
||||
Other comprehensive income (loss), net of tax:
|
||||||||
Changes in unrealized gain (loss) on available-for-sale securities
|
(
|
)
|
|
|||||
Cash flow hedge:
|
||||||||
Changes in unrealized gain (loss)
|
(
|
)
|
(
|
)
|
||||
Loss (gain) reclassified into net income
|
|
|
||||||
Net change
|
(
|
)
|
(
|
)
|
||||
Change in foreign currency translation
|
|
(
|
)
|
|||||
Total other comprehensive income (loss), net of tax:
|
(
|
)
|
(
|
)
|
||||
Comprehensive Income
|
$
|
|
$
|
|
Common shares
|
Additional paid-in capital
|
Accumulated other comprehensive income (loss)
|
Retained earnings (accumulated deficit)
|
Treasury shares
|
Total shareholders’ equity
|
|||||||||||||||||||||||
Number of Shares
|
$
|
$
|
$
|
$
|
$
|
$
|
||||||||||||||||||||||
Balance as of December 31, 2021 (audited)
|
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|
||||||||||||||||||
Stock-based compensation expenses
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||
Proceeds from exercise of stock-based compensation
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Other comprehensive loss
|
-
|
|
|
(
|
)
|
|
|
(
|
)
|
|||||||||||||||||||
Net Income
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance as of June 30, 2022 (unaudited)
|
|
|
|
(
|
)
|
|
(
|
)
|
|
|||||||||||||||||||
Stock-based compensation expenses
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||
Proceeds from exercise of stock-based compensation
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Other comprehensive income
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||
Net Income
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance as of December 31, 2022 (audited)
|
|
|
|
(
|
)
|
|
(
|
)
|
|
|||||||||||||||||||
Stock-based compensation expenses
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||
Proceeds from exercise of stock-based compensation
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Other comprehensive loss
|
-
|
|
|
(
|
)
|
|
|
(
|
)
|
|||||||||||||||||||
Net Income
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance as of June 30, 2023 (unaudited)
|
|
|
|
(
|
)
|
|
(
|
)
|
|
|
Six months ended
|
|||||||
|
June 30,
|
|||||||
|
2023
|
2022
|
||||||
|
(Unaudited)
|
(Unaudited)
|
||||||
Cash flows from operating activities
|
||||||||
Net Income
|
$
|
|
$
|
|
||||
Adjustments required to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
|
|
||||||
Stock-based compensation expenses
|
|
|
||||||
Foreign currency translation
|
(
|
)
|
(
|
)
|
||||
Accrued interest, net
|
(
|
)
|
(
|
)
|
||||
Deferred taxes, net
|
(
|
)
|
(
|
)
|
||||
Accrued severance pay, net
|
(
|
)
|
|
|||||
Gain from sale of property and equipment
|
(
|
)
|
(
|
)
|
||||
Net changes in operating assets and liabilities
|
||||||||
Accounts receivable, net
|
|
|
||||||
Prepaid expenses and other current assets
|
(
|
)
|
(
|
)
|
||||
Amortization of premium and accretion of discount on marketable securities, net
|
(
|
)
|
|
|||||
Other assets
|
(
|
)
|
|
|||||
Operating Lease right-of-use assets
|
|
|
||||||
Operating Lease liabilities
|
(
|
)
|
(
|
)
|
||||
Accounts payable
|
(
|
)
|
(
|
)
|
||||
Accrued expenses and other liabilities
|
(
|
)
|
(
|
)
|
||||
Deferred revenues
|
(
|
)
|
(
|
)
|
||||
Payment obligation related to acquisition
|
|
(
|
)
|
|||||
Net cash provided by operating activities
|
$
|
|
$
|
|
||||
|
||||||||
Cash flows from investing activities
|
||||||||
Purchases of property and equipment
|
(
|
)
|
(
|
)
|
||||
Proceeds from sale of property and equipment
|
|
|
||||||
Investment in marketable securities
|
(
|
)
|
|
|||||
Proceeds from sales and maturities of marketable securities
|
|
|
||||||
Proceeds from short-term deposits
|
|
|
||||||
Investment in short-term deposits
|
(
|
)
|
(
|
)
|
||||
Cash paid in connection with acquisitions, net of cash acquired
|
|
(
|
)
|
|||||
Net cash used in investing activities
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
||||||||
Cash flows from financing activities
|
||||||||
Proceeds from exercise of stock-based compensation
|
|
|
||||||
Payments of contingent consideration
|
(
|
)
|
(
|
)
|
||||
Net cash used in financing activities
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash
|
|
(
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents and restricted cash
|
|
(
|
)
|
|||||
Cash and cash equivalents and restricted cash at beginning of period
|
|
|
||||||
Cash and cash equivalents and restricted cash at end of period
|
$
|
|
$
|
|
Six months ended
|
||||||||
June 30,
|
||||||||
2023
|
2022
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheet
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Restricted cash
|
|
|
||||||
Total cash, cash equivalents, and restricted cash
|
$
|
|
$
|
|
||||
Supplemental Disclosure of Cash Flow Activities:
|
||||||||
Cash paid during the period for:
|
||||||||
Income taxes
|
$
|
|
$
|
|
||||
Interest
|
$
|
|
$
|
|
||||
Non-cash investing and financing activities:
|
||||||||
Purchase of property and equipment on credit
|
$
|
|
$
|
|
NOTE 1: |
GENERAL
|
NOTE 2: |
SIGNIFICANT ACCOUNTING POLICIES
|
F - 7
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
F - 8
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
• |
Level 1 - Observable inputs obtained from independent sources, such as quoted prices for identical assets and liabilities in active markets.
|
• |
Level 2 - Other inputs that are directly or indirectly observable in the market place.
|
• |
Level 3 - Unobservable inputs which are supported by little or no market activity, and unobservable inputs based on the Company's own assumptions used to measure liabilities at fair value. The inputs require significant management judgment or estimation.
|
F - 9
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
F - 10
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 4: MARKETABLE SECURITIES
June 30, 2023
|
||||||||||||||||
Amortized
cost
|
Gross unrealized
gain
|
Gross unrealized loss
|
Fair value
|
|||||||||||||
Matures within one year:
|
||||||||||||||||
Corporate debentures
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
Government debentures
|
|
(
|
)
|
|
||||||||||||
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||
Matures after one year through three years:
|
||||||||||||||||
Corporate debentures
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
Government debentures
|
|
|
(
|
)
|
|
|||||||||||
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||
Total
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
As of June 30, 2023, the Company had
As of June 30, 2023,
F - 11
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
June 30, 2023
|
||||||||||||||||
Fair value measurements using input type
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets:
|
||||||||||||||||
Available-for-sale marketable securities marketable securities:
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Total financial assets
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Liabilities:
|
||||||||||||||||
Derivative liability
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Contingent consideration in connection to the acquisitions
|
|
|
|
|
||||||||||||
Total financial liabilities
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2022
|
||||||||||||||||
Fair value measurements using input type
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets:
|
||||||||||||||||
Derivative assets
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Total financial assets
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Liabilities:
|
||||||||||||||||
Derivative liabilities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Contingent consideration in connection to the acquisitions
|
|
|
|
|
||||||||||||
Total financial liabilities
|
$
|
|
$
|
|
$
|
|
$
|
|
F - 12
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
Fair value as of December 31, 2022
|
$
|
|
||
Payments of contingent consideration
|
(
|
)
|
||
Changes in fair value of contingent consideration
|
|
|||
Revaluation of acquisition-related contingent consideration
|
|
|||
Fair value as of June 30, 2023
|
$
|
|
a. |
Goodwill
|
Balance as of January 1, 2022
|
$
|
|
||
Vidazoo measurement period adjustments
|
$
|
|
||
Balance as of December 31, 2022
|
$
|
|
||
Balance as of June 30, 2023
|
$
|
|
F - 13
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
b. |
Intangible assets, net
|
December 31,
2022
|
Amortization
|
June 30,
2023
|
||||||||||
Acquired technology
|
$
|
|
$
|
|
$
|
|
||||||
Accumulated amortization
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Impairment
|
(
|
)
|
|
(
|
)
|
|||||||
Acquired technology, net
|
|
(
|
)
|
|
||||||||
Customer relationships
|
|
|
|
|||||||||
Accumulated amortization
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Impairment
|
(
|
)
|
|
(
|
)
|
|||||||
Customer relationships, net
|
|
(
|
)
|
|
||||||||
Tradename and other
|
|
|
|
|||||||||
Accumulated amortization
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Impairment
|
(
|
)
|
|
(
|
)
|
|||||||
Tradename and other, net
|
|
(
|
)
|
|
||||||||
Intangible assets, net
|
$
|
|
$
|
(
|
)
|
$
|
|
F - 14
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
December 31, 2021 |
Vidazoo
measurement
period
adjustments
|
Amortization
|
December 31,
2022
|
|||||||||||||
Acquired technology
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Accumulated amortization
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
Impairment
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Acquired technology, net
|
|
|
(
|
)
|
|
|||||||||||
Customer relationships
|
|
|
|
|
||||||||||||
Accumulated amortization
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
Impairment
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Customer relationships, net
|
|
|
(
|
)
|
|
|||||||||||
Tradename and other
|
|
|
|
|
||||||||||||
Accumulated amortization
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
Impairment
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Tradename and other, net
|
|
|
(
|
)
|
|
|||||||||||
Intangible assets, net
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
F - 15
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 7: |
SHAREHOLDERS' EQUITY
|
a. |
Ordinary shares
|
b. |
Share Options, Restricted Share Units and Warrants
|
Weighted average
|
||||||||||||||||
Number of options
|
Exercise price
|
Remaining contractual term (in years)
|
Aggregate intrinsic value
|
|||||||||||||
Outstanding at January 1, 2023
|
|
$
|
|
|
$
|
|
||||||||||
Granted
|
|
|
-
|
-
|
||||||||||||
Exercised
|
(
|
)
|
|
-
|
|
|||||||||||
Cancelled
|
(
|
)
|
|
-
|
-
|
|||||||||||
Outstanding at June 30, 2023
|
|
$
|
|
|
$
|
|
||||||||||
Exercisable at June 30, 2023
|
|
$
|
|
|
$
|
|
||||||||||
Vested and expected to vest at June 30, 2023
|
|
$
|
|
|
$
|
|
F - 16
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
Weighted average
|
||||||||||||||||
Number of options
|
Exercise price
|
Remaining contractual term (in years)
|
Aggregate intrinsic value
|
|||||||||||||
Outstanding at January 1, 2023
|
|
$
|
|
|
$
|
|
||||||||||
Granted
|
|
|
-
|
-
|
||||||||||||
Exercised
|
(
|
)
|
|
-
|
|
|||||||||||
Cancelled
|
(
|
)
|
|
-
|
-
|
|||||||||||
Outstanding at June 30, 2023
|
|
$
|
|
|
$
|
|
||||||||||
Exercisable at June 30, 2023
|
|
|
|
|
||||||||||||
Vested and expected to vest at June 30, 2023
|
|
$
|
|
|
$
|
|
F - 17
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 9: EARNINGS PER SHARE
Six months ended June 30,
|
||||||||
2023
|
2022
|
|||||||
Numerator:
|
||||||||
Net income attributable to ordinary shares – basic and diluted
|
$
|
|
$
|
|
||||
Denominator:
|
||||||||
Number of ordinary shares outstanding during the period
|
|
|
||||||
Weighted average effect of dilutive securities:
|
||||||||
Employee options and restricted share units
|
|
|
||||||
Diluted number of ordinary shares outstanding
|
|
|
||||||
Basic net earnings per ordinary share
|
$
|
|
$
|
|
||||
Diluted net earnings per ordinary share
|
$
|
|
$
|
|
||||
Potential ordinary shares equivalents excluded because their effect would have been anti-dilutive
|
|
|
F - 18
PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 10: MAJOR CUSTOMER
Six months ended June 30,
|
||||||||
2023
|
2022
|
|||||||
Customer A
|
|
|
|
|
||||
Customer B
|
|
|
|
Six months ended June 30,
|
||||||||
2023
|
2022
|
|||||||
North America (mainly U.S.)
|
$
|
|
$
|
|
||||
Europe
|
|
|
||||||
Other
|
|
|
||||||
$
|
|
$
|
|
June 30, |
December 31, |
|||||||
2023 |
2022 |
|||||||
Israel
|
$
|
|
$
|
|
||||
U.S.
|
|
|
||||||
Europe
|
|
|
||||||
$ |
|
$
|
|
F - 19
1.
|
The ability to monetize search traffic through our partnership with Microsoft Advertising (Bing) and other search providers, as reflected in the consistent growth of our
publisher network;
|
2.
|
The ability to meet advertiser’s needs for higher sustained user engagement with our proven high-impact ad suite;
|
3.
|
The ability to monetize the fast-growing retail media segment, having rapidly succeeded in attracting significant retail customers;
|
4.
|
The ability to innovate and implement AI-driven solutions where it matters most to brands, including our creative platforms which produces thousands of dynamic creative ad
permutations;
|
5.
|
Our AI-based cookieless targeting solution, SORT®, designed for an effective and successful response to intensifying privacy concerns and the
upcoming deprecation of cookies by Google.
SORT® Delivers Superior Results While Respecting Privacy
|
1.
|
Operational Savings – Shared Resources
|
2.
|
Traffic Acquisition Costs and Media Buy (TAC) Optimization
|
3.
|
Increased Customer Value
|
4.
|
Market Agility
|
5.
|
Creative Firepower
|
Document and Entity Information |
6 Months Ended |
---|---|
Jun. 30, 2023 | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | Perion Network Ltd. |
Entity Central Index Key | 0001338940 |
Current Fiscal Year End Date | --12-31 |
Document Type | 6-K |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2023 |
Document Fiscal Period Focus | Q2 |
Document Fiscal Year Focus | 2023 |
Entity File Number | 000-51694 |
Entity Address, Address Line One | 1 Azrieli Center, Building A, 4th Floor |
Entity Address, Address Line Two | 26 HaRokmim Street |
Entity Address, City or Town | Holon |
Entity Address Country | IL |
Entity Address, Postal Zip Code | 5885849 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands |
Jun. 30, 2023
₪ / shares
|
Jun. 30, 2023
USD ($)
shares
|
Dec. 31, 2022
₪ / shares
|
Dec. 31, 2022
USD ($)
shares
|
---|---|---|---|---|
Statement of Financial Position [Abstract] | ||||
Accounts receivable, allowance for doubtful accounts | $ | $ 2,215 | $ 2,134 | ||
Ordinary shares, par value per share | ₪ / shares | ₪ 0.03 | ₪ 0.03 | ||
Ordinary shares, shares authorized | 80,000,000 | 60,000,000 | ||
Ordinary shares, shares issued | 47,154,827 | 46,287,732 | ||
Ordinary shares, shares outstanding | 47,039,488 | 46,172,393 | ||
Treasury shares | 115,339 | 115,339 |
INTERIM CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Revenue | ||
Display Advertising | $ 179,257 | $ 150,154 |
Search Advertising | 144,363 | 121,817 |
Total Revenue | 323,620 | 271,971 |
Costs and Expenses: | ||
Cost of revenue | 17,148 | 13,474 |
Traffic acquisition costs and media buy | 181,357 | 156,930 |
Research and development | 16,589 | 17,369 |
Selling and marketing | 28,812 | 27,293 |
General and administrative | 13,956 | 12,134 |
Changes in fair value of contingent consideration | 14,602 | 0 |
Depreciation and amortization | 6,766 | 6,393 |
Total Costs and Expenses | 279,230 | 233,593 |
Income from Operations | 44,390 | 38,378 |
Financial income, net | 8,586 | 1,507 |
Income before Taxes on income | 52,976 | 39,885 |
Taxes on income | 7,785 | 4,919 |
Net Income | $ 45,191 | $ 34,966 |
Net Earnings per Share | ||
Basic | $ 0.97 | $ 0.79 |
Diluted | $ 0.91 | $ 0.74 |
Weighted average number of shares | ||
Basic | 46,673,439 | 44,238,414 |
Diluted | 49,551,061 | 47,210,769 |
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||
Net Income | $ 45,191 | $ 34,966 |
Other comprehensive income (loss), net of tax: | ||
Changes in unrealized gain (loss) on available-for-sale securities | (477) | 0 |
Cash flow hedge: | ||
Changes in unrealized gain (loss) | (817) | (1,109) |
Loss (gain) reclassified into net income | 686 | 395 |
Net change | (131) | (714) |
Change in foreign currency translation | 85 | (435) |
Total other comprehensive income (loss), net of tax: | (523) | (1,149) |
Comprehensive Income | $ 44,668 | $ 33,817 |
INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands |
Common shares [Member] |
Additional paid-in capital [Member] |
Accumulated other comprehensive income (loss) [Member] |
Retained earnings (accumulated deficit) [Member] |
Treasury shares [Member] |
Total |
---|---|---|---|---|---|---|
Balance at Dec. 31, 2021 | $ 375 | $ 496,154 | $ (128) | $ (28,439) | $ (1,002) | $ 466,960 |
Balance, shares at Dec. 31, 2021 | 43,696,723 | |||||
Stock-based compensation expenses | $ 0 | 5,129 | 0 | 0 | 0 | 5,129 |
Proceeds from exercise of stock-based compensation | $ 4 | 1,290 | 0 | 0 | 0 | 1,294 |
Proceeds from exercise of stock-based compensation, shares | 966,245 | |||||
Other comprehensive income (loss) | $ 0 | 0 | (1,149) | 0 | 0 | (1,149) |
Net Income | 0 | 0 | 0 | 34,966 | 0 | 34,966 |
Balance at Jun. 30, 2022 | $ 379 | 502,573 | (1,277) | 6,527 | (1,002) | 507,200 |
Balance, shares at Jun. 30, 2022 | 44,662,968 | |||||
Stock-based compensation expenses | $ 0 | 6,441 | 0 | 0 | 0 | 6,441 |
Proceeds from exercise of stock-based compensation | $ 19 | 4,520 | 0 | 0 | 0 | 4,539 |
Proceeds from exercise of stock-based compensation, shares | 1,509,425 | |||||
Other comprehensive income (loss) | $ 0 | 0 | 695 | 0 | 0 | 695 |
Net Income | 0 | 0 | 0 | 64,259 | 0 | 64,259 |
Balance at Dec. 31, 2022 | $ 398 | 513,534 | (582) | 70,786 | (1,002) | $ 583,134 |
Balance, shares at Dec. 31, 2022 | 46,172,393 | 46,172,393 | ||||
Stock-based compensation expenses | $ 0 | 6,502 | 0 | 0 | 0 | $ 6,502 |
Proceeds from exercise of stock-based compensation | $ 7 | 2,181 | 0 | 0 | 0 | 2,188 |
Proceeds from exercise of stock-based compensation, shares | 867,095 | |||||
Other comprehensive income (loss) | $ 0 | 0 | (523) | 0 | 0 | (523) |
Net Income | 0 | 0 | 0 | 45,191 | 0 | 45,191 |
Balance at Jun. 30, 2023 | $ 405 | $ 522,217 | $ (1,105) | $ 115,977 | $ (1,002) | $ 636,492 |
Balance, shares at Jun. 30, 2023 | 47,039,488 | 47,039,488 |
GENERAL |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2023 | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
GENERAL |
Perion Network Ltd. ("Perion") and its wholly-owned subsidiaries (collectively referred to as the "Company"), is a global multi-channel advertising technology company that delivers synergistic solutions across all major channels of digital advertising – including search, social media, display, video and connected TV (CTV). These channels converge at Perion’s intelligent HUB (iHUB), which connects the Company’s demand and supply assets, providing significant benefits to brands and publishers.
|
SIGNIFICANT ACCOUNTING POLICIES |
6 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2023 | ||||||||||||
Accounting Policies [Abstract] | ||||||||||||
SIGNIFICANT ACCOUNTING POLICIES |
Basis of presentation of the Financial Statements
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the "SEC") regarding interim financial reporting. Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited interim consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited interim consolidated financial statements should be read in conjunction with the Company’s Annual Report on 20-F for the fiscal year ended December 31, 2022, filed with the SEC on March 15, 2023 (the "Annual Report"). The interim period results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.
There have been no changes to the significant accounting policies described in the Annual Report that have had a material impact on the unaudited interim consolidated financial statements and related notes.
Use of estimates
The preparation of the consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from those estimates.
On an ongoing basis, the Company's management evaluates its estimates, including those related to sales allowances and allowance for credit losses, fair value of intangible assets and goodwill, useful lives of intangible assets, fair value of share-based awards, realizability of deferred tax assets, tax uncertainties, marketable securities and contingent liabilities, among others. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable which are the basis for making judgments about the carrying values of the Company’s assets and liabilities.
Revenue recognition
The Company applies the provisions of Accounting Standards Codification 606, Revenue from Contracts with Customers ("ASC 606" or "Topic 606").
The Company applies the practical expedient for incremental costs of obtaining contracts when the associated revenue is recognized over less than one year.
The Company generates revenue primarily from two major sources:
Display Advertising Revenue (“Advertising”) - the Company generates advertising revenue from delivering high impact ad formats through different channels – display, social and video/CTV, creatively designed to capture consumer attention and drive engagement, across a hand-picked portfolio of websites and mobile applications. The Company also generates advertising revenue from content optimization solutions and services, which are recognized once the advertisement partners serve their advertisement across owned and operated properties as well as those of the Company publishers. In addition, the Company generates revenue from the use of its platform in online media channels which connects video and display advertisements derived from advertising partners to advertising inventory available within its publisher’s network.
Search Advertising Revenue (“Search Monetization”) - the Company obtains its search revenue from service agreements with its search partners. Search revenue is generated primarily from monthly transaction volume-based fees earned by the Company for making its applications available to online publishers and app developers on a revenue share basis relative to the revenue generated by the search partners.
For more disaggregated information of revenue refer to Note 11.
The Company’s payments terms are less than one year. Therefore, no finance component is recognized.
The Company evaluates whether Advertising Revenue and Search Monetization should be presented on a gross basis, which is the amount that a customer pays for the service, or on a net basis, which is the amount of the customer payment less amounts the Company pays to publishers. In making that evaluation, the Company considers whether it controls the promised good or service before transferring that good or service to the customer. The Company considers indicators such as whether the Company is the primary obligor in the arrangement and assumes risks and rewards as a principal or an agent, whether it changes the products or performs part of the service, whether the Company has discretion in establishing prices and whether it controls the underlying advertising space. The evaluation of these factors is subject to significant judgment and subjectivity.
Generally, in cases in which the Company controls the specified good or service before it is transferred to a customer, revenue is recorded on a gross basis.
Contract balances are presented separately on the consolidated balance sheets as either Accounts receivable or Deferred revenue. The Company does not have contract assets.
Accounts receivable includes amounts billed and currently due from customers.
Deferred revenue are recorded when payments are received from customers in advance of the Company's rendering of services.
Fair value of financial instruments
The carrying amounts of financial instruments carried at cost, including cash and cash equivalents, short-term deposits, restricted cash, accounts receivable, and other assets, accounts payable, accrued expenses and other liabilities approximate their fair value due to the short-term maturities of such instruments.
The Company measures its marketable securities, foreign currency derivative contracts and earn-out considerations at fair value. Marketable securities and foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. The Company's earn-out considerations were classified within Level 3.
In determining a fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability, based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect assumptions that market participants would use in pricing an asset or liability, based on the best information available under given circumstances.
The hierarchy is broken down into three levels, based on the observability of inputs and assumptions, as follows:
Marketable Securities
Marketable securities currently are comprised of debt securities. We determine the appropriate classification of marketable securities at the time of purchase and re-evaluate such designation at each balance sheet date. In accordance with FASB ASC No. 320, “Investment Debt Securities”, we classify marketable securities as available-for-sale. Available-for-sale securities are stated at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss), a separate component of shareholders’ equity, net of taxes. Realized gains and losses on sales of marketable securities, as determined on a specific identification basis, are included in finance income, net. The amortized cost of marketable securities is adjusted for amortization of premium and accretion of discount to maturity, both of which, together with interest, are included in finance income, net. The Company has classified all marketable securities as short-term, even though the stated maturity date may be one year or more beyond the current balance sheet date, because it is probable that the Company will sell these securities prior to maturity to meet liquidity needs or as part of risk versus reward objectives.
At each reporting period, the Company evaluates whether declines in fair value below amortized cost are due to expected credit losses, as well as the Company’s ability and intent to hold the investment until a forecasted recovery occurs in accordance with ASC 326, Financial Instrument - Credit losses. Allowance for credit losses on available-for-sale marketable securities are recognized in the Company’s consolidated statements of operations, and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss) in shareholders’ equity.
The Company did not recognize an allowance for credit losses on marketable securities for the period ended June 30, 2023.
Recent Accounting Pronouncements not yet adopted
In October 2021 the FASB ASU 2021-08, Topic 805 “Business Combinations” – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments in this update require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. To achieve this, an acquirer may assess how the acquiree applied Topic 606 to determine what to record for the acquired revenue contracts. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and early adoption is permitted. The adoption of the new guidance will have an immaterial impact on its consolidated financial statements. The Company adopted ASU 2021-08 on January 1, 2023, and the adoption has an immaterial impact on its consolidated financial statements.
|
ACQUISITIONS |
6 Months Ended |
---|---|
Jun. 30, 2023 | |
Business Combinations [Abstract] | |
ACQUISITIONS |
NOTE 3: ACQUISITIONS
On October 4, 2021, the Company consummated the acquisition of Vidazoo Ltd., also known as “Vidazoo” (the “Vidazoo Acquisition”), a leading video technology company that enables both advertisers and publishers to deliver high impact content and advertising to consumers.
The total consideration for the acquisition was $90,038, comprised of $35,000 paid in cash at closing, contingent consideration (with a maximum amount of up to $58,545), tied to financial targets over a period of 2.25 years, estimated at fair value of $48,903 on the acquisition date ($41,054 as of June 30, 2023), and a net working capital in the amount of $6,135 which will be set-off against collection.
On May 30, 2023, the Company entered into an amendment to the SPA with Vidazoo’s sellers in connection with an additional overachievement earnout consideration in an aggregate amount of up to $10,550 payable in the Company’s ordinary shares. As of June 30, 2023, the additional overachievement contingent consideration is estimated at fair value of $6,458 which was recognized under Changes in fair value of contingent consideration in the Consolidated Statements of Income and the aggregate contingent consideration is estimated at fair value of $47,512.
|
MARKETABLE SECURITIES |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MARKETABLE SECURITIES |
NOTE 4: MARKETABLE SECURITIES The following is a summary of available-for-sale marketable securities by investment categories and contractual maturities as of June 30,2023:
As of June 30, 2023, the Company had no investments with unrealized loss for more than 12 months.
As of June 30, 2023, no credit loss impairment was recorded regarding the available for sale marketable securities |
FAIR VALUE OF FINANCIAL INSTRUMENTS |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Of Financial Instruments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS |
NOTE 5: FAIR VALUE OF FINANCIAL INSTRUMENTS
The following table present assets and liabilities measured at fair value on a recurring basis as of June 30, 2023:
The following table present assets and liabilities measured at fair value on a recurring basis as of December 31, 2022:
The following table sets forth a summary of the changes in the fair value of the contingent consideration:
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GOODWILL AND INTANGIBLE ASSETS, NET |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS, NET |
NOTE 6: GOODWILL AND INTANGIBLE ASSETS, NET
The changes in the net carrying amount of goodwill in 2022 and six months ended June 30, 2023 were as follows:
Goodwill has been recorded as a result of prior acquisitions and represents excess of the consideration over the net fair value of the assets of the businesses acquired. As of June 30, 2023, the Company had two reporting units – Display Advertising and Search Advertising. The Company performs tests for impairment of goodwill at the reporting unit level at least annually, or more frequently if events or changes in circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying value. As of June 30, 2023, the Company determined that there were no indicators of potential impairment with regards to its reporting units which required interim goodwill impairment analysis.
The following is a summary of intangible assets as of June 30, 2023:
The following is a summary of intangible assets as of December 31, 2022:
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SHAREHOLDERS' EQUITY |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHAREHOLDERS' EQUITY |
The ordinary shares of the Company entitle their holders to voting rights, the right to receive cash dividend and the right to a share in excess assets upon liquidation of the Company.
In 2003, the Company's Board of Directors approved the 2003 Equity Incentive Plan (the "Plan") for an initial term of ten years from adoption and on December 9, 2012, extended the term of the Plan for an additional ten years. On November 7, 2022 the Compensation Committee approved to extend the term of the Incentive Plan for an additional period of two years, expiring on December 9, 2024.
On August 7, 2013, the Company’s Board of Directors approved amendments to the Plan which include the ability to grant RSUs and restricted shares.
The contractual term of the share options is generally no more than seven years and the vesting period of the options and RSUs granted under the Plan is between and three years from the date of grant. The rights of the ordinary shares issued upon the exercise of share options or RSUs are identical to those of the other ordinary shares of the Company.
As of June 30, 2023, there were 1,010,167 ordinary shares reserved for future share-based awards under the Plan.
The following table summarizes the activities for the Company’s service-based share options and RSU’s for the six months ended June 30, 2023:
The following table summarizes the activities for the Company’s performance-based share options and RSU’s for the six months ended June 30, 2023:
The performance-based share options’ vesting is contingent upon achieving specific financial targets of the Company, set at the grant date.
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INCOME TAXES |
6 Months Ended |
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Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES |
NOTE 8: INCOME TAXES
The Company had a tax expense of $7,785 and $4,919 for the six months ended June 30, 2023 and 2022, respectively.
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EARNINGS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE |
NOTE 9: EARNINGS PER SHARE The table below presents the computation of basic and diluted net earnings per common share:
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MAJOR CUSTOMER |
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Risks and Uncertainties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
MAJOR CUSTOMER |
NOTE 10: MAJOR CUSTOMER A substantial portion of the Company's revenue is derived from search fees and online advertising, the market for which is highly competitive and rapidly changing. Significant changes in this industry or in customer buying behavior would adversely affect the Company’s operating results.
The following table sets forth the customers that represent 10% or more of the Company’s total revenues in each of the periods presented below:
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GEOGRAPHIC INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GEOGRAPHIC INFORMATION |
NOTE 11: GEOGRAPHIC INFORMATION
The following table presents the total revenues for six months ended June 30, 2023 and 2022, allocated to the geographic areas in which they were generated:
The following table presents the locations of the Company’s long-lived assets as of June 30, 2023 and December 31, 2022:
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SIGNIFICANT ACCOUNTING POLICIES (Policies) |
6 Months Ended | |||||||||
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Jun. 30, 2023 | ||||||||||
Accounting Policies [Abstract] | ||||||||||
Basis of presentation of the Financial Statements |
Basis of presentation of the Financial Statements
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the "SEC") regarding interim financial reporting. Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited interim consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited interim consolidated financial statements should be read in conjunction with the Company’s Annual Report on 20-F for the fiscal year ended December 31, 2022, filed with the SEC on March 15, 2023 (the "Annual Report"). The interim period results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.
There have been no changes to the significant accounting policies described in the Annual Report that have had a material impact on the unaudited interim consolidated financial statements and related notes.
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Use of estimates |
Use of estimates
The preparation of the consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from those estimates.
On an ongoing basis, the Company's management evaluates its estimates, including those related to sales allowances and allowance for credit losses, fair value of intangible assets and goodwill, useful lives of intangible assets, fair value of share-based awards, realizability of deferred tax assets, tax uncertainties, marketable securities and contingent liabilities, among others. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable which are the basis for making judgments about the carrying values of the Company’s assets and liabilities.
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Revenue recognition |
Revenue recognition
The Company applies the provisions of Accounting Standards Codification 606, Revenue from Contracts with Customers ("ASC 606" or "Topic 606").
The Company applies the practical expedient for incremental costs of obtaining contracts when the associated revenue is recognized over less than one year.
The Company generates revenue primarily from two major sources:
Display Advertising Revenue (“Advertising”) - the Company generates advertising revenue from delivering high impact ad formats through different channels – display, social and video/CTV, creatively designed to capture consumer attention and drive engagement, across a hand-picked portfolio of websites and mobile applications. The Company also generates advertising revenue from content optimization solutions and services, which are recognized once the advertisement partners serve their advertisement across owned and operated properties as well as those of the Company publishers. In addition, the Company generates revenue from the use of its platform in online media channels which connects video and display advertisements derived from advertising partners to advertising inventory available within its publisher’s network.
Search Advertising Revenue (“Search Monetization”) - the Company obtains its search revenue from service agreements with its search partners. Search revenue is generated primarily from monthly transaction volume-based fees earned by the Company for making its applications available to online publishers and app developers on a revenue share basis relative to the revenue generated by the search partners.
For more disaggregated information of revenue refer to Note 11.
The Company’s payments terms are less than one year. Therefore, no finance component is recognized.
The Company evaluates whether Advertising Revenue and Search Monetization should be presented on a gross basis, which is the amount that a customer pays for the service, or on a net basis, which is the amount of the customer payment less amounts the Company pays to publishers. In making that evaluation, the Company considers whether it controls the promised good or service before transferring that good or service to the customer. The Company considers indicators such as whether the Company is the primary obligor in the arrangement and assumes risks and rewards as a principal or an agent, whether it changes the products or performs part of the service, whether the Company has discretion in establishing prices and whether it controls the underlying advertising space. The evaluation of these factors is subject to significant judgment and subjectivity.
Generally, in cases in which the Company controls the specified good or service before it is transferred to a customer, revenue is recorded on a gross basis.
Contract balances are presented separately on the consolidated balance sheets as either Accounts receivable or Deferred revenue. The Company does not have contract assets.
Accounts receivable includes amounts billed and currently due from customers.
Deferred revenue are recorded when payments are received from customers in advance of the Company's rendering of services.
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Fair value of financial instruments |
Fair value of financial instruments
The carrying amounts of financial instruments carried at cost, including cash and cash equivalents, short-term deposits, restricted cash, accounts receivable, and other assets, accounts payable, accrued expenses and other liabilities approximate their fair value due to the short-term maturities of such instruments.
The Company measures its marketable securities, foreign currency derivative contracts and earn-out considerations at fair value. Marketable securities and foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. The Company's earn-out considerations were classified within Level 3.
In determining a fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability, based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect assumptions that market participants would use in pricing an asset or liability, based on the best information available under given circumstances.
The hierarchy is broken down into three levels, based on the observability of inputs and assumptions, as follows:
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Marketable Securities |
Marketable Securities
Marketable securities currently are comprised of debt securities. We determine the appropriate classification of marketable securities at the time of purchase and re-evaluate such designation at each balance sheet date. In accordance with FASB ASC No. 320, “Investment Debt Securities”, we classify marketable securities as available-for-sale. Available-for-sale securities are stated at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss), a separate component of shareholders’ equity, net of taxes. Realized gains and losses on sales of marketable securities, as determined on a specific identification basis, are included in finance income, net. The amortized cost of marketable securities is adjusted for amortization of premium and accretion of discount to maturity, both of which, together with interest, are included in finance income, net. The Company has classified all marketable securities as short-term, even though the stated maturity date may be one year or more beyond the current balance sheet date, because it is probable that the Company will sell these securities prior to maturity to meet liquidity needs or as part of risk versus reward objectives.
At each reporting period, the Company evaluates whether declines in fair value below amortized cost are due to expected credit losses, as well as the Company’s ability and intent to hold the investment until a forecasted recovery occurs in accordance with ASC 326, Financial Instrument - Credit losses. Allowance for credit losses on available-for-sale marketable securities are recognized in the Company’s consolidated statements of operations, and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss) in shareholders’ equity.
The Company did not recognize an allowance for credit losses on marketable securities for the period ended June 30, 2023.
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Recent Accounting Pronouncements not yet adopted |
Recent Accounting Pronouncements not yet adopted
In October 2021 the FASB ASU 2021-08, Topic 805 “Business Combinations” – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments in this update require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. To achieve this, an acquirer may assess how the acquiree applied Topic 606 to determine what to record for the acquired revenue contracts. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and early adoption is permitted. The adoption of the new guidance will have an immaterial impact on its consolidated financial statements. The Company adopted ASU 2021-08 on January 1, 2023, and the adoption has an immaterial impact on its consolidated financial statements.
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MARKETABLE SECURITIES (Tables) |
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Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Marketable Securities by Significant Investing Categories |
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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Of Financial Instruments Tables Abstract | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Measurements |
The following table present assets and liabilities measured at fair value on a recurring basis as of June 30, 2023:
The following table present assets and liabilities measured at fair value on a recurring basis as of December 31, 2022:
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Schedule of changes in Fair Value of Contingent Consideration |
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GOODWILL AND INTANGIBLE ASSETS, NET (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Goodwill |
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Schedule of Other Intangible Assets |
The following is a summary of intangible assets as of June 30, 2023:
The following is a summary of intangible assets as of December 31, 2022:
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SHAREHOLDERS' EQUITY (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Option Activity |
The following table summarizes the activities for the Company’s service-based share options and RSU’s for the six months ended June 30, 2023:
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Service Based Stock Options [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Option Activity |
The following table summarizes the activities for the Company’s performance-based share options and RSU’s for the six months ended June 30, 2023:
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EARNINGS PER SHARE (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings per Share |
|
MAJOR CUSTOMER (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
Risks and Uncertainties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenues by Major Customer |
|
GEOGRAPHIC INFORMATION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue by Geographic Area |
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Schedule of Property and Equipment by Geographic Area |
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ACQUISITIONS (Narrative) (Details) - Vidazoo [Member] - USD ($) $ in Thousands |
Oct. 04, 2021 |
Jun. 30, 2023 |
May 30, 2023 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Total consideration | $ 90,038 | ||
Cash paid | 35,000 | ||
Maximum contingent consideration for acquisition | $ 58,545 | ||
Earn out period | 2 years 3 months | ||
Estimated fair value of consideration in acquisition | $ 48,903 | $ 41,054 | |
Net working capital | $ 6,135 | ||
Additional overachievement earnout payment | $ 10,550 | ||
Fair value of the additional overachievement earnout payment | 6,458 | ||
Estimated fair value of aggregate contingent consideration | $ 47,512 |
MARKETABLE SECURITIES (Narrative) (Details) $ in Thousands |
Jun. 30, 2023
USD ($)
|
---|---|
Investments, Debt and Equity Securities [Abstract] | |
Investments | $ 0 |
Credit loss impairment available for sale marketable securities | $ 0 |
FAIR VALUE OF FINANCIAL INSTRUMENTS (Schedule of changes in fair value of contingent consideration) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Accounting Policies [Abstract] | ||
Fair value as of December 31, 2022 | $ 63,695 | |
Payments of contingent consideration | (13,256) | $ (9,091) |
Changes in fair value of contingent consideration | 14,602 | $ 0 |
Revaluation of acquisition related contingent consideration | 292 | |
Fair value as of June 30, 2023 | $ 65,333 |
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Schedule of Changes in Goodwill) (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2023 |
Dec. 31, 2022 |
|
Goodwill [Line Items] | ||
Balance at beginning of period | $ 195,527 | $ 189,265 |
Vidazoo measurement period adjustments | 6,262 | |
Balance at end of period | $ 195,527 | $ 195,527 |
SHAREHOLDERS' EQUITY (Schedule of Stock Option Activity) (Details) - Service Based Stock Options [Member] - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2023 |
Dec. 31, 2022 |
|
Number of options | ||
Outstanding, Beginning | 3,064,674 | |
Granted | 293,489 | |
Exercised | (691,451) | |
Cancelled | (123,332) | |
Outstanding, Ending | 2,543,380 | 3,064,674 |
Exercisable | 348,455 | |
Vested and expected to vest | 2,786,069 | |
Weighted average Exercise price | ||
Outstanding, Beginning | $ 1.39 | |
Granted | 0.01 | |
Exercised | 2.72 | |
Cancelled | 0.11 | |
Outstanding, Ending | 0.93 | $ 1.39 |
Exercisable | 5.16 | |
Vested and expected to vest | $ 0.95 | |
Weighted average Remaining contractual term ( in years) | ||
Outstanding | 65 years 3 months 18 days | 59 years 8 months 12 days |
Exercisable | 2 years 11 months 4 days | |
Vested and expected to vest | 5 months 23 days | |
Aggregate intrinsic value | ||
Outstanding, Beginning | $ 73,284 | |
Exercised | 22,228 | |
Outstanding, Ending | 75,649 | $ 73,284 |
Exercisable | 8,889 | |
Vested and expected to vest | $ 149,576 |
SHAREHOLDERS' EQUITY (Schedule of service-based stock options) (Details) - Performance Based Stock Options [Member] - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2023 |
Dec. 31, 2022 |
|
Number of Performance based options | ||
Outstanding, Beginning | 592,511 | |
Granted | 112,500 | |
Exercised | (175,644) | |
Cancelled | (21,901) | |
Outstanding, Ending | 507,466 | 592,511 |
Exercisable | 0 | |
Vested and expected to vest | 493,272 | |
Weighted average Exercise price | ||
Outstanding, Beginning | $ 0.51 | |
Granted | 0.01 | |
Exercised | 1.71 | |
Cancelled | 0.01 | |
Outstanding, Ending | 0.01 | $ 0.51 |
Exercisable | 0 | |
Vested and expected to vest | $ 0.01 | |
Weighted average Remaining contractual term (in years) | ||
Outstanding | 77 years | 70 years 7 months 20 days |
Exercisable | 0 years | |
Vested and expected to vest | 0 years | |
Aggregate intrinsic value | ||
Outstanding, Beginning | $ 14,690 | |
Exercised | 5,982 | |
Outstanding, Ending | 15,564 | $ 14,690 |
Exercisable | ||
Vested and expected to vest | $ 30,693 |
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Income Tax Disclosure [Abstract] | ||
Taxes on income | $ 7,785 | $ 4,919 |
EARNINGS PER SHARE (Schedule of computation of basic and diluted net earnings per common share) (Details) - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Numerator: | ||
Net income attributable to ordinary shares – basic and diluted | $ 45,191 | $ 34,966 |
Denominator: | ||
Number of ordinary shares outstanding during the period | 46,673,439 | 44,238,414 |
Weighted average effect of dilutive securities: | ||
Employee options and restricted share units | 2,877,622 | 2,972,355 |
Diluted number of ordinary shares outstanding | 49,551,061 | 47,210,769 |
Basic net earnings per ordinary share | $ 0.97 | $ 0.79 |
Diluted net earnings per ordinary share | $ 0.91 | $ 0.74 |
Potential ordinary shares equivalents excluded because their effect would have been anti-dilutive | 173,224 | 929,784 |
MAJOR CUSTOMER (Schedule of company's total revenues) (Details) - Customer Concentration Risk [Member] - Revenue [Member] |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Customer A [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of total revenues from a customer | 29.00% | 35.00% |
Custome B [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of total revenues from a customer | 14.00% | |
Percentage of total revenues from a customer | Less than 10 |
GEOGRAPHIC INFORMATION (Schedule of total revenues of geographical areas) (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Dec. 31, 2022 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total Revenues | $ 323,620 | $ 271,971 | |
Long-lived assets | 11,499 | $ 13,741 | |
North America (mainly U.S.) [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total Revenues | 279,106 | 234,918 | |
Europe [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total Revenues | 34,897 | 30,767 | |
Long-lived assets | 115 | 138 | |
Other [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total Revenues | 9,617 | $ 6,286 | |
Israel [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-lived assets | 5,022 | 6,176 | |
U.S. [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Long-lived assets | $ 6,362 | $ 7,427 |
1 Year Perion Network Chart |
1 Month Perion Network Chart |
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