On The Horizon
On the Horizon will be a spinoff of WTR's Small-Cap Spotlight focusing exclusively on our Horizons client as well as other micro- and nano-cap companies.
On The Horizon
Perion Networks (PERI): Algo Trading for Ads — Perion's AI Layer for a Trillion-Dollar Market
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In this episode of the On The Horizon podcast, Tal Jacobson, CEO of Perion Network (NASDAQ: PERI), joins host Tim Gerdeman and WTR's James Kisner to discuss how the repositioned, AI-native Perion is tackling fragmentation in the trillion-dollar digital ad market. Jacobson walks through Perion One — a platform that sits above ad-buying platforms like Google, YouTube, Meta, and TikTok, rather than replacing them — and Outmax, the company's AI agent that applies algorithmic-trading methodology to media buying for 52 Fortune 100 companies. Because Perion owns no inventory, it can recommend shifting spend to whichever channel delivers the best outcome — an edge single-channel players can't match. The conversation covers Q4 momentum, growth in CTV, Digital Out-of-Home, and Retail Media, partnerships with Amazon, Walmart Connect, and Mastercard, and a three-year plan targeting 20%+ organic ex-TAC CAGR, 28% EBITDA margins by 2028, and $300M+ in cash.
Welcome to the WTR on the horizon podcast. I'm your host, Tim Gerderman, Vice Chair and Co-Founder and Chief Marketing Officer of Watertower Research. Today we're joined by Tal Jacobson, Chief Executive Officer of Perrion Network, NASDAQ Ticker Symbol PERI. Perrian is an AI-native advertising technology company that helps brands, agencies, retailers optimize their ad spend across channels like Connected TV, digital out-of-home, retail media, social, and the open web. The company's Perrion One platform and its Outmax AI agents serve 52 of the Fortune 100 companies. Also joining us is my WTR equity research colleague, James Kisner. Good morning, gentlemen, and thank you for joining me. Hey, good morning. Thanks for having me. Tal, you've called 2026 year one for the new Peryon. For listeners who may not be familiar with the company's evolution, can you please give them a quick overview of what Peryon does and where the company is strategically headed?
SPEAKER_00Absolutely. So Peryon has been around for years, uh, especially as a public company. But last year we totally pivoted the company and reset our strategy, our management team, uh, and our product line. And we're now focusing on the biggest problem of digital advertising. Now, digital advertising is a huge market with over a trillion dollars a year in marketing spent. And we figured out that there's the biggest issue is it's too fragmented, too many platforms, too many solutions, and extremely hard for CFOs and CMOs to understand how the money is being spent and what is the ROI. So Peryon One does not replace other platforms, but it actually sits above all other platforms and try to make sense out of the noise to help CMOs and CFOs to understand their yield on their media investment.
SPEAKER_01Great, thank you. I think I may have misspoken. I believe it was 2025 that you called year one, correct?
SPEAKER_00Yes, 2025.
SPEAKER_01Yes, okay, very good. James?
SPEAKER_02Yeah, thanks, thanks, Tim. And again, welcome, Kyle. So um we had a really strong fourth quarter. Uh contribution extack was up 19%. Uh even I was up over 50%. So, what's driving that momentum and how much of it is the period one um platform starting to click?
SPEAKER_00Yeah. Uh uh the majority of our of our products and our new products is focused on outcome. So, really about ROI on media spent. And we're seeing great success on that. And especially with uncertainty in the economy, we're seeing more and more advertisers shifting dollars into outcome-driven products. And that's what uh we saw in Q4, which was, as you said, a pretty strong quarter.
SPEAKER_02Um, all right, let's turn to your growth engines. Um, CTV, uh, digital out of home, and retail media. Um, they're all growing well ahead of the broader market. Can you talk about what's fueling that and where you see the most runway?
SPEAKER_00Sure. Um, you're absolutely right. Uh our CTV is showing um very nice growth. Our retail media also a good adoption, and our digital out of home, which I think the market is now realizing is a great channel for performance. I don't think that was the case a few years back. Uh as I said, it all comes now under one roof and other one platform. So it's easier for our customers to now upsell uh across budgets in between those channels, and that really drove um those growth.
SPEAKER_02Okay, thank you. So um let's turn to Outmax, which is really, I think, central to the period-one story. So for investors who aren't deep in ad tech, can you explain in plain terms what Outmax does and why an advertiser would use it instead of just going directly through Google or Meta?
SPEAKER_00Yeah, absolutely. So a lot of investors are asking us this. I think it's gonna be easier to investors to even understand this better even to than marketers. Custom algo, oh custom uh algo trading has been around for like 20 years in the stock market, and we know algo trading can do things that no human can do, right? It's it's impossible to compete with that. We took that exact uh metology and created um an algo trading for media. So when you think about it, there's a trillion dollar year going through the pipes, and now we have an AI agent that sits above those buying platforms and buy through an algorithm on behalf of our brands. And as you said, we serve the majority of the 1,000 top brands in the US, and a lot of them are now using Altmax, which provides up to 80 or 90 percent better results than the manual work.
SPEAKER_02Yeah, algorithm trading has certainly taken over the world and had a huge impact. I can see how that would that would uh that would help in your world as well. Um so you've announced some notable partnerships recently. Um Amazon, Walmart Connect, MasterCard, and you acquired GreenBids last year, which became Outmax, of course. So um, and that now works with big platforms such as Google, YouTube, Meta, and TikTok. So, how do these pieces fit together and you know what do they unlock for for Perin going forward? Yeah.
SPEAKER_00So I think we you know, with in this entire evolution of AI, data is really the key, right? So it's like fuel for cars. AI without a lot of data is not is not going to be able to do anything. So those partnerships, especially with big retailers on consumer behavior data, no personal data, of course, but consumer behavior data, uh really helps our AI algorithm to provide better results. And our again, our job is not to replace anybody, any other platform. Our job is to sit above those platforms with the right data and the right algorithm to provide those results. And we think partnership is the way to go and the way to scale as fast as possible.
SPEAKER_02That makes a ton of sense. Um so the market is fragmenting across walled gardens, you might call them CTV, retail media, the open web. Um, you know, instead of relying on a single channel, Pyrion 1 is pitched as this kind of channel agnostic, um, you know, channel channel agnostic platform. So how does your AI ensure advertisers get the best outcomes across such a divided landscape?
SPEAKER_00Yeah. Um I think I think that's really the strongest part of Pyrion. Well, you know, companies like Meta or TikTok or Google are great. They really are amazing at what they do. They can only offer you their own inventory. So you would never hear Meta say, you know what, for this specific campaign, you should actually go to Google. With us, we're not connected to any inventory. So our goal is to make you the best yield on your media investment. And we can actually recommend for a specific campaign and say, you know what, for this specific campaign, we think you should do less of that and more of this, which is which is very unique. There are no other companies in the world that can actually do that, especially with an algorithm that can actually shift that.
SPEAKER_02Sounds very value-added. So um I like to kind of sort of uh step back and maybe take a take a higher level view. Um, you know, you've laid out a three-year plan and you're targeting 20 plus percent organic uh contribution, you know, XTAC Kegger. That was a long set of uh acronyms, um, and expanding EBITDA margins to 28% by 2028. Um, you're shooting on over 300 million in cash. You know, how does your focus on the AI execution layer distinguished Perry on in the market? And how does it inherently drive the operating leverage needed to fit those long-term profitability targets?
SPEAKER_00Yeah. So when we look at the products that we have under the hood that's Perry on one now on our platform, and we look back on on the historical growth for those specific products, we were always around 19, 20 percent the over year. So, and we think that's that's obviously uh we feel that that that should still be the case around around that. Um as of as of as for efficiency, you know, the EVDA margin we think by and in 2028 should go to 28 percent. And obviously AI is is a major driver, right, in efficiency. A lot of automation. We do not, as we scale our revenue, we do not think we need to scale our uh the amount of people, the head count. So that should really drive the efficiency going forward.
SPEAKER_02Yeah, sounds like it's not just a revenue driver, it's it's also an efficiency driver uh for you guys. And that's that's great to see uh you guys benefiting from AI from kind of all sides there. So well, um, thank you, Tom. I'm gonna pass it back to Tim just to wrap things up for us.
SPEAKER_01Oh well, thanks, gentlemen, for joining us today. A very interesting story at Pyrion, and uh look forward to following it as 2026 unfolds. So uh thanks again for joining me today.
SPEAKER_00Thank you.
SPEAKER_01Thank you for listening, and do not forget to subscribe, as well as visiting www.watertowerresearch.com to stay up to speed on the WTR on the horizon written research reports podcasts, fireside chats, industry specific symposiums, and conference schedules. We will see you next time for another edition of WTR on the horizon podcast. Finally, a special thanks to the producer and editor of the podcast, Krista Fitzpatrick.