Why Perion Network Stock Was Falling Today
Key Points
Perion beat estimates on the bottom line, but missed on the top in Q1.
The company's growth initiatives are delivering solid results.
The legacy business, meanwhile, appears to be challenged.
Shares of Perion Network (NASDAQ: PERI), the adtech company known for its intelligent hub that connects buyers and sellers, were taking a dive after the company missed estimates in its first-quarter earnings report.
As of 11:35 a.m. ET, the stock was down 15.6% on the news.
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What happened with Perion
Perion continued to struggle in the first quarter, despite posting solid results in key growth initiatives like Connected TV (CTV) and digital out of home (DOOH).
Overall revenue rose 1% to $90.4 million, which was short of the consensus at $91.7 million. On the bottom line, adjusted earnings per share was flat at $0.11, which beat the consensus at $0.06.
Management reported strong results in its growth engines as its AI agent adoption jumped by 316%; CTV spend rose 68%, DOOH spend was up 29%, and retail media spend rose 27%.
Despite that growth, Perion's legacy ad business appears to be struggling as revenue from its ad solutions segment fell 4% in the quarter to $66.7 million.
What's next for Perion
Looking ahead to the rest of the year, the adtech company reiterated its guidance, calling for contribution revenue excluding traffic acquisition costs of $215 million-$235 million and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $50 million-$54 million. Those numbers compare to $203.4 million in contribution ex-TAC and adjusted EBITDA of $45.2 million in 2025.
Perion has struggled to grow since losing Microsoft as a search client, and the guidance suggests investors should temper their expectations. While its growth initiatives are delivering results, it could be years before they move the needle on overall revenue. Until then, Perion seems likely to be stuck in neutral.
Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.