Perion Network Ltd. Files 20-F Annual Report

TL;DR

<b>Perion Network Ltd. has filed its 20-F annual report, detailing financial performance and disclosures for 2021-2023, including specific reclassifications and lease payment information.</b>

AI Summary

Perion Network Ltd. (PERI) filed a Foreign Annual Report (20-F) with the SEC on April 8, 2024. Perion Network Ltd. filed its annual 20-F report for the fiscal year ending December 31, 2023. The filing includes financial data and disclosures for the years 2021, 2022, and 2023. Specific reclassifications of $3,816 (2022) and $2,246 (2021) were made from general and administrative to change in fair value of contingent consideration. Lease payments totaling $5,646 are not offset by expected non-cancelable future sublease payments. The company holds $5,010 in cash as of December 31, 2035.

Why It Matters

For investors and stakeholders tracking Perion Network Ltd., this filing contains several important signals. This filing provides a comprehensive overview of Perion Network Ltd.'s financial health and operational status for the past fiscal year, crucial for investors assessing the company's performance and future prospects. The detailed disclosures on reclassifications and lease obligations offer insights into the company's accounting practices and financial commitments, which can impact profitability and cash flow.

Risk Assessment

Risk Level: — Perion Network Ltd. shows moderate risk based on this filing. The company faces medium risk due to potential customer concentration, as indicated by the repeated mention of 'MajorCustomerOne' and 'MajorCustomerTwo' across multiple fiscal years in the context of sales revenue and customer concentration risk.

Analyst Insight

Investors should closely examine the company's customer concentration risk and its strategies for mitigating reliance on major clients.

Key Numbers

• 2023 — Fiscal Year End (Conformed period of report)
• 2024-04-08 — Filing Date (Filed as of date)
• 3,816 — Reclassification Amount (2022) (Incurred in connection with an acquisition)
• 2,246 — Reclassification Amount (2021) (Incurred in connection with an acquisition)
• 5,646 — Expected Sublease Payments (Offset to total lease payments)
• 5,010 — Cash Held (As of December 31, 2035)

Key Players & Entities

• Perion Network Ltd. (company) — Filer name
• 20-F (document) — Form type
• 20231231 (date) — Conformed period of report
• 20240408 (date) — Filed as of date
• $3,816 (dollar_amount) — Reclassification amount in 2022
• $2,246 (dollar_amount) — Reclassification amount in 2021
• $5,646 (dollar_amount) — Expected non-cancelable future sublease payments
• $5,010 (dollar_amount) — Cash held as of December 31, 2035

FAQ

Risk Factors

• Customer Concentration Risk [medium — financial]: The company's reliance on major customers, identified as 'MajorCustomerOne' and 'MajorCustomerTwo', presents a risk to sales revenue.

Key Financial Figures

• $1 — ars at an exchange rate of NIS 3.627 to $1.00, the representative exchange rate re

Filing Documents

• zk2431117.htm (20-F) — 2873KB
• exhibit_2-1.htm (EX-2.1) — 56KB
• exhibit_8-1.htm (EX-8.1) — 5KB
• exhibit_12-1.htm (EX-12.1) — 14KB
• exhibit_12-2.htm (EX-12.2) — 14KB
• exhibit_13-1.htm (EX-13.1) — 5KB
• exhibit_13-2.htm (EX-13.2) — 5KB
• exhibit_15-1.htm (EX-15.1) — 5KB
• exhibit_97-1.htm (EX-97.1) — 31KB
• image01.jpg (GRAPHIC) — 232KB
• 0001178913-24-001251.txt (&nbsp;) — 13103KB
• peri-20231231.xsd (EX-101.SCH) — 85KB
• peri-20231231_cal.xml (EX-101.CAL) — 72KB
• peri-20231231_def.xml (EX-101.DEF) — 285KB
• peri-20231231_lab.xml (EX-101.LAB) — 1046KB
• peri-20231231_pre.xml (EX-101.PRE) — 480KB
• zk2431117_htm.xml (XML) — 2457KB

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This Annual Report on Form 20-F contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our, or our industries' actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, implied or inferred by these forward-looking statements. In some cases, you can identify forward-looking "expects," "plans," "intends," "anticipates," "believes," "estimates," "predicts," "projects," "potential" or "continue" or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking events or results may differ materially from our current expectations. All forward-looking statements included in this report are based on information available to us on the date of this report. Except as required by applicable law, we undertake no obligation to update or revise any of the forward-looking statements after the date of this annual report on Form 20-F to conform those statements to reflect the occurrence of unanticipated events, new information or otherwise. 3 You should read this annual report on Form 20-F and the documents that we reference in this report completely and with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we currently expect. Fa

Identity of Directors, Senior Management

Item 1. Identity of Directors, Senior Management and Advisers 10

Offer Statistics and Expected Timetable

Item 2. Offer Statistics and Expected Timetable 10

Key Information

Item 3. Key Information 10 [RESERVED] 10 A. Selected Financial Data 10 B. Capitalization and Indebtedness 10 C. Reasons for the Offer and Use of Proceeds 10 D. Risk Factors 10

Information on the Company

Item 4. Information on the Company 44 A. History and Development of the Company 44 B. Business Overview 45 C. Organizational Structure 58 D. Property, Plants and Equipment 58

Unresolved Staff Comments

Item 4A. Unresolved Staff Comments 59

Operating and Financial Review and

Item 5. Operating and Financial Review and Prospects 59 A. Operating Results 59 B. Liquidity And Capital Resources 62 C. Research, Development, Patents and Licenses, Etc. 64 D. Trend Information 64 E. Critical Accounting Estimates 66

Directors, Senior Management and Employees

Item 6. Directors, Senior Management and Employees 68 A. Directors and Senior Management 68 B. Compensation 71 C. Board Practices 74 D. Employees 77 E. Share 78 F. Disclosure of a Registrant's Action to Recover Erroneously Awarded Compensation 79 7

Major Shareholders and Related Party

Item 7. Major Shareholders and Related Party Transactions 80 A. Major Shareholders 80 B. Related Party Transactions 81 C. Interests of Experts and Counsel 81

Financial Information

Item 8. Financial Information 81 A. Consolidated 81 B. Significant Changes 82

The Offer and Listing

Item 9. The Offer and Listing 82 A. Offer and Listing Details 82 B. Plan of Distribution 82 C. Markets 82 D. Selling Shareholders 82 E. Dilution 82 F. Expenses of the Issue 82

Additional Information

Item 10. Additional Information 82 A. Share Capital 82 B. Memorandum and Articles of Association 82 C. Material Contracts 82 D. Exchange Controls 83 E. Taxation 83 F. Dividends and Paying Agents 91 G. Statement by Experts 91 H. Documents on Display 92 I. Subsidiary Information 92 J. Annual Report to Security Holders 92

Quantitative and Qualitative Disclosures

Item 11. Quantitative and Qualitative Disclosures about Market Risk 92

Description of Securities Other

Item 12. Description of Securities Other than Equity Securities 93 8 PART II 93

Defaults, Dividend Arrearages and

Item 13. Defaults, Dividend Arrearages and Delinquencies 93

Material Modifications to the Rights

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds 93

Controls and Procedures

Item 15. Controls and Procedures 93

RESERVED

Item 16. RESERVED 94

Audit Committee Financial Expert

Item 16A. Audit Committee Financial Expert 94

Code of Ethics

Item 16B. Code of Ethics 94

Principal Accountant Fees and

Item 16C. Principal Accountant Fees and Services 94

Exemptions from the Listing Standards

Item 16D. Exemptions from the Listing Standards for Audit Committees 95

Purchases of Equity Securities

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers 95

Change in Registrant's Certifying

Item 16F. Change in Registrant's Certifying Accountant 95

Corporate Governance

Item 16G. Corporate Governance 95

Mine Safety Disclosure

Item 16H. Mine Safety Disclosure 96

Disclosure Regarding Foreign Jurisdictions

Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection 96

Insider Trading Policies

ITEM 16J. Insider Trading Policies 96

Cybersecurity

Item 16K. Cybersecurity 96 PART III 97

Financial Statements

Item 17. Financial Statements 97

Financial Statements

Item 18. Financial Statements 97

Exhibits

Item 19. Exhibits 98

Signatures

Signatures 98 Index F-1 9 PART I

IDENTITY

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS Not applicable.

OFFER

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE Not applicable.

KEY

ITEM 3. KEY INFORMATION A.

SELECTED FINANCIAL DATA

SELECTED FINANCIAL DATA Reserved. B. CAPITALIZATION AND INDEBTEDNESS Not applicable. C. REASONS FOR OFFER AND USE OF PROCEEDS Not applicable. D.

RISK FACTORS

RISK FACTORS We are subject to various risks and uncertainties relating to or arising out of the nature of our business and general business, economic, financial, legal and other factors or conditions that may affect us. We believe that the occurrence of any one or some combination of the following factors could have a material adverse effect on our business, financial condition, cash flows and results of operations. Risks Related to our Search

Business

Business Our search advertising solution depends heavily upon revenue generated from our agreement with Microsoft, and any adverse change in that agreement could adversely affect our business, financial condition and results of operations. We are highly dependent on our search services agreement with Microsoft Irelands Operations Limited. ("Microsoft"). We entered into our first agreement with Microsoft in 2010. In November 2020, we entered into a renewed agreement with Microsoft effective as of January 1, 2021 and in effect until December 31, 2024 (the "Microsoft Agreement"). In 2022, our search advertising business Unit, CodeFuel, was named by Microsoft Advertising the "Global Supply Partner of the Year". The Microsoft Agreement accounted for 37%, 35% and 34% of our revenue, in 2021, 2022 and 2023, respectively. If the Microsoft Agreement is terminated, expires or is substantially amended on terms not favorable to us, we would experience a material decrease in our search advertising revenue and profits and would be forced to seek additional or alternative search provider services, at less competitive terms or accelerate the business we have with such search providers. In the first quarter of 2024, we experienced a decline in our search advertising activity, attributable to changes in advertising pricing and mechanisms implemented by Microsoft in its search distribution marketplace. These adjustments led to a reduction in Revenue Per Thousand Impressions (RPM) for both Perion and other Microsoft distribution partners. These changes contributed to decreased search volume. Our results of operations were negatively impacted as a result in the first quarter of 2024 and we expect an adverse impact on our results of operations in the future. Only a few companies in the market provide internet search and search advertising services similar to those provided by Microsoft, such as Google and Yahoo. Such companies are substantially the only participants in western markets

View Full Filing

View this 20-F filing on SEC EDGAR