Good day everyone. Welcome to the Perion first quarter 2014 earnings conference. Just a reminder, today's call is being recorded, and at this time, it is my pleasure to turn the conference over to Deborah Margalit, Perion Investor Relations. Deborah, please go ahead.
Thank you. We appreciate the attention of everyone who is joining today. On today's call, management will be reviewing the financial results and business highlights of the first quarter ended March 30, 2014. The press release detailing the results is available on the company's website at perion.com. Before we begin, I'd like to read the following safe harbor statement. Today's discussion will include forward-looking statements. These statements reflect the company's current views with respect to future events. These forward-looking statements involve known and unknown risks, uncertainties, and other factors, including those discussed under the heading Risk Factors and elsewhere in the company's annual report on Form 20-F that may cause actual results, performance, or achievements to be materially different from any future results, performances, or achievements anticipated or implied by these forward-looking statements. The company does not undertake to revise any forward-looking statements to reflect future events or circumstances.
In addition, as in prior quarters, the results reported today will be analyzed on a non-GAAP basis, which management believes better conveys the operational state of the business. We have provided a detailed reconciliation of non-GAAP measures to the comparable GAAP measures in our earnings release, which is available on our website and has also been filed on Form 6-K. With that, I turn the call over to Josef Mandelbaum, Chief Executive Officer. Josef?
Thank you, Deborah. Good morning, everyone. Welcome to our 2014 first quarter earnings call. This was a great start to 2014 for Perion, with record financial results and continued strong growth, both in terms of revenue and profitability. I'm very pleased with the progress we have made, especially given the significant task of consolidating and fully integrating Perion with ClientConnect. The theme of the first quarter and into the second quarter has been integration. The greatest challenge of most acquisitions is not the negotiations leading up to closing. Rather, it is the post-merger integration to ensure future success. I'm happy to report that the integration process has gone faster and smoother than we anticipated. I'm extremely encouraged with the incredible talent we have assembled. When we embarked on this journey nine months ago, we started planning ahead with a post-merger integration process to be implemented immediately upon closing.
It consisted of employees from both sides and proceeded to develop 10 different working teams to tackle everything from financial reporting consolidation to quick business wins and infrastructure cost savings. Many of these teams, excuse me, have already finished their original objectives and have moved on to other potential synergy projects within the company. I think it is fair to say that the execution capabilities of the team have been stellar, as evidenced by our financial results. With $117.1 million in revenue, $33.6 million in EBITDA, and over $27.6 million in net income, this was truly a great quarter. More importantly, it is a great testament to the talented, execution-oriented team we have at Perion and budding expertise we have developed with regard to acquisitions.
Today, Perion is stronger than ever with the talent, scale, resources, infrastructure, and expertise necessary to develop and deploy new solutions that leverage our current business and position Perion as a clear industry leader. We are now the second-largest search distribution company in the world and one of the largest software distribution providers through our industry-leading technology platform. We are particularly excited as this transformative acquisition provides us the means and resources to implement our three-year diversification strategy. This strategy will take Perion from being a company with one main revenue source and obvious industry challenges to a multi-product and multi revenue-based company. Our vision remains the same, however, as we strive to be the platform and partner of choice for developers who want to promote, monetize, and optimize their business.
Simply put, it has become increasingly challenging to be a software or app developer, even as the consumer market has grown with smartphones and tablets. It remains challenging for software and app developers to get discovered. While the logistics of distribution on the mobile side are slightly easier, marketing your offering and creating an awareness to your product is still very difficult. On top of all this, it has become much more difficult to monetize applications. Half of all apps don't generate enough revenue to cover development costs, let alone marketing costs. In a recent study done by AdKite, an online research company, it found that 49% of all app developers, both on the desktop and mobile platform, said discovery is their biggest problem, with monetization a close second.
To make things more difficult, most app developers, being small businesses, lack the analytical capabilities to improve funnel conversion, create systems for tracking revenue per user, or implement traffic acquisition campaigns. In the same study by AdKit, it found that 68% of all developers are either individuals or belong to a small business with fewer than 10 employees. Today at Perion, we are laser-focused on addressing all these challenges as we build our lifecycle management platform. This powerful solution will essentially provide a comprehensive, single, and cross-platform solution for app developers that want to increase their distribution Optimize the engagement of the users and of course, monetize those users. Today, we largely utilize search agreements to provide monetization solutions to developers. In the coming quarters, though, we'll see display advertising playing an increasingly prominent role in our monetization efforts.
In addition to potential acquisitions to help us round out our lifecycle management platform, we have launched a few organic initiatives in the first quarter, and are pleased with their progress. The first is using our data while maintaining the highest level of privacy policy standards to build a profiling system to help our partners increase their display advertising revenue through targeted advertising, which yield higher CPMs. Our new scale and massive data set give us a powerful advantage in the display advertising space. While the test is still in its early stages, we are very encouraged by the increased yield our data is able to provide to advertisers and therefore our partners. The second initiative we launched this quarter is a mobile distribution platform leveraging our business intelligence systems to help developers increase the efficacy and yield of their marketing efforts.
We have partnered with a number of market leaders as design partners for this new platform, and we'll update you on our progress next quarter. The third initiative is focused on extending our core search business into the mobile arena. We are working on a few variations of a mobile search product that will leverage our unique search partnerships and tremendous expertise in the search business. These offerings are customized for certain verticals and our partners' needs while delivering a good consumer experience. Though it is still in its early stages, it is showing some encouraging results. Before I turn the call over to Yacov for a detailed financial analysis, let me mention that we recently filed a shelf registration statement with the SEC, specifically registering certain shares issued in connection with our reverse acquisition of ClientConnect.
This filing was agreed to at the time of signing, was one of the conditions of the agreement, and was disclosed in the proxy statement issued last October and in our annual report. Affiliates of Perion need a shelf registration because they have resale restrictions under SEC rules. However, this filing was just a technicality, as all shareholders are still under the agreed-upon lock-up provisions. As a reminder, approximately five and a half million shares will be eligible to come off lock-up by July 3, 2014, when all shareholders can sell up to 10% of their holdings. Approximately 40% of the shares issued to the shareholders remain locked up for at least another year and a half, while the other 50% remain locked up, dependent on our stock price increasing to $15, $18.50, and $22.
We are exploring different options to put in place a structure that will facilitate an organized and responsible way for these shares to be sold. To explain our thoughts in a bit more detail, allow me to elaborate. We believe that increasing the float and expanding liquidity could help facilitate new institutional ownership of Perion stock and reduce potential investor concerns about the relatively small public float and limited liquidity of Perion stock. Increasing our float and attracting new institutional investors will also lower the volatility of our stock. In addition, we are contemplating a debt offering to residents of Israel. We favor a debt offering because of the low prevailing interest rates and our goal of minimizing dilution to our shareholders. Our strong cash flow supports our ability to service the debt.
We have a history of making good strategic acquisitions, we have shown that we are cautious and methodical in this approach. That will not change. With that, I'll turn the call over to Yacov, we'll take your questions. Yacov?
Thank you, Josef. As mentioned earlier, the accounting for the acquisition of ClientConnect is viewed under U.S. GAAP as a reverse acquisition. As such, I'll be discussing the non-GAAP results for Perion in the first quarter of 2014 as compared to the non-GAAP results for ClientConnect in the first quarter of last year. In addition, for the sake of transparency, for this quarter alone, I will compare the main components of Perion's results to those of the combined Perion-ClientConnect entities in the first quarter of 2013 on a non-GAAP basis. Given our past history of acquisitions and our intention to do future acquisitions, we do not intend to compare against combined in future quarters. Revenue for Perion this quarter was $117.1 million, increasing $37.4 million or 47% compared to $79.7 million at ClientConnect in the first quarter last year.
On a combined basis, revenues increased $9.9 million or 9% as compared to $107.3 million in the first quarter of 2013. In the first quarter of 2014, non-GAAP revenues include $2.3 million of Perion's deferred product revenues, which were deducted in accordance with U.S. GAAP as a result of the acquisition. In the first quarter of 2014, Perion increased its investment in customer acquisition by 49% to $59.6 million, representing 51% of revenues, as compared to $40.1 million or 50% of revenues in the first quarter of 2013 by ClientConnect. On a combined basis, the two companies spent $51.5 million on customer acquisition in the first quarter last year. R&D expenses this quarter were $12.2 million or 10% of revenues compared to $9.7 million, or 12% of revenues, in the first quarter of 2013.
Non-GAAP R&D expenses in the first quarter of 2014 and 2013 do not include $1.1 million and $0.6 million, respectively, of non-cash employee equity compensation included in the GAAP report. Non-GAAP R&D expenses in the first quarter of 2013 at ClientConnect included $5.2 million of expenses classified as discontinued operations in the GAAP report. Looking forward, we intend to further increase our investment in developing new products for new platforms without increasing the expense as a percentage of sales. Sales and marketing expenses for the quarter, excluding customer acquisition costs, were $4.4 million, or 4% of revenues, compared to $4.1 million or 5% of revenues in the same quarter last year. These expenses were reduced in the non-GAAP report for the first quarter of 2013 and 2014 by $0.3 million and $1.4 million, respectively, for non-cash equity compensation and amortization expenses included in the GAAP reports.
In addition, the non-GAAP reports for the first quarter of 2013 included $1.9 million of expenses classified as discontinued operations in the GAAP report. Our G&A expense for the quarter was $5.3 million, or 5% of non-GAAP revenues, compared to $2.4 million or 3% of revenues in the first quarter of last year. The increase in G&A reflects our building ClientConnect into a sustainable company capable of being active in the public and M&A markets. Building in part on the management platform created in Perion, which had G&A expenses of $1.9 million in the first quarter of 2013. This quarter, GAAP operating expenses, including cost of goods, included $4.4 million of non-cash share-based compensation, $4.5 million amortization of acquired intangible assets, and $2.9 million in acquisition-related expenses, providing for a total of $11.8 million adjustment of GAAP operating expenses.
In the first quarter of 2013, the GAAP operating and cost of goods sold expenses were increased by a total of $7.7 million classified as discontinued operations in the GAAP report, partially offset by an increase of expenses by $0.4 million of non-cash employee equity compensation. During the first quarter of 2014, EBITDA was $33.6 million, or 29% of non-GAAP revenues, up 49% compared to $22.5 million or 28% of non-GAAP revenues in the first quarter of 2013. On a combined pro forma basis, EBITDA increased $3.2 million or 10%. Perion's net income in the first quarter of 2014 was $27.6 million, increasing 41% from $19.5 million at ClientConnect in the first quarter of 2013. On a combined basis, the two companies generated in the first quarter of 2013 $25.3 million in net income, in comparison to which net income therefore increased 9% this quarter.
Again, I caution that this figure does not account for any synergies achieved as a result of the split of ClientConnect from Conduit and the subsequent combination. As of March 31st, 2014, cash and cash equivalents were $51.2 million, or approximately $0.75 per share. This was made up primarily of $13.9 million cash flow from operations, $23.4 million cash balance at Perion prior to the acquisition, and a $14.8 million short-term loan from Conduit to support working capital post-acquisition. In the context of acquiring the ClientConnect business, Perion did not acquire cash or working capital. As such, a significant amount of the quarter's profits were reflected in creating working capital. Once accomplished, we expect cash flow from operations to be closely correlated to net income in the coming quarters. This concludes my financial overview.
Let me now review some key operating metrics for the first quarter and end with our 2014 outlook. Our total queries in the quarter totaled approximately 3.4 billion, of which 1.5 billion were from Tier 1 countries and 1.9 billion from the rest of the world. Tier 1 queries increased year-over-year as we shifted our customer acquisitions to Tier 1 countries, away from the rest of the world with the industry changes in February of 2013. In addition, as we move more toward advertising, we felt it important to start reporting some relevant metrics. Ad impressions totaled approximately 3.9 billion impressions, with 1.5 billion of them in Tier 1 countries and 2.4 billion in the rest of the world. Lastly, we are reiterating our full year 2014 guidance. We continue to expect revenues to be in the range of $460 million-$470 million.
EBITDA is expected to be between $125 million and $130 million, and net income is expected to be in the range of $103 million to $108 million. We are seeing some seasonality in our business, and as Josef mentioned earlier, there are still some expected headwinds from certain browser changes to be implemented at the end of the second or beginning of the third quarter, which will impact the quarter-to-quarter results. We expect the fourth quarter to be our strongest quarter, with the second and third quarters slightly weaker on a relative basis. Therefore, despite our better-than-expected first quarter performance, we are leaving our full year guidance as is and remain confident we will achieve it. With that, we will now open the call to questions. Operator?
Thank you. The question and answer session will be conducted electronically. If you'd like to ask a question today, please press star one on your touchtone telephone. Just a reminder, if you're joining us via speakerphone today, make sure your mute function is turned off to allow the signal to reach our equipment. Once again, ladies and gentlemen, star one. We'll go first to Kerry Rice at Needham.
Thanks a lot. Hey, Josef. Hey, Yacov. A couple questions, maybe if you can elaborate a little bit, one on your targeted display advertising that you're going to roll out. Is that both online and mobile, and how do you look at that progressing through the year? The second question is expanding local search into mobile, and can you maybe add some more color around that? Is that in-app? Is that mobile web? Just a quick housekeeping on the number of queries and ad impressions. I don't know if you could give any year-over-year growth rates. I know you said that queries grew year-over-year, but if you could give any more specifics, that'd be great. Thank you.
Sure. Thanks for the questions, Kerry. Okay. I'll try to take them one at a time, and Yacov can chime in. On the targeted advertising side, we have started this quarter partnering with a few select companies, and we are seeing that our data, the first thing, actually, building our own profiling system in-house, building the RGB system. Right now it's mostly online, specifically. We are seeing some nice early results in terms of the yield or the lift in the yield for our advertisers and our partners in terms of monetization. In the mobile distribution side that I mentioned we're building, part of that also will do some targeting. That's probably going to be towards the latter half of the year.
While the targeted advertising side we're working on now, I hope by the end of the Q2, we'll probably roll out in a more aggressive way in early Q3. That's the plan as of today. We're excited about what we can do with that and hopefully look to leverage our position in the marketplace, to get into, we think, a field which is growing significantly, both online and on mobile, and which we have significant assets that up until today, frankly, just have never been utilized for a variety of reasons that today we're unlocking as part of the acquisition. We now have enough scale, and as you know, with the data side, you need enough scale to really be able to leverage your data enough to give an increased yield to advertisers.
It's probably focused today primarily on the desktop as a proof of concept first, but in the mobile distribution initiative I mentioned second, we are also looking at some of the opportunities we have to do some targeting on the mobile side, and I'll explain probably more of that in the second quarter earnings call as we have more data. On your mobile search side, on that one, what we're doing is specifically we're targeting some verticals. It's in-app. It's not mobile web today. It's in-app, and we've targeted some verticals that we think are very appropriate, that have good reach. Through our existing relationships, basically it's adding on some type of nice consumer-looking search box and search products into the app or integrated into the app itself.
These are mostly people who either can't get the deals directly with the search providers, and some of them are our partners already. We just started launching that, and we're seeing actually some nice LTV in the initial, it's been, I think, operational for six to eight weeks, and we're seeing some good initial results with some of our partners. Again, it'll take a while to roll out, but we think we've identified two or three or four verticals which we think are really appealing to this type of product offering that will help them add incremental monetization to their apps. With regard to the queries, if I may, as we mentioned in the prepared comments, we are leveraging the advantages of our Bing contract and therefore shifting our attention to Tier 1 countries.
Just to give a little bit more color, we said we had about 3.4 billion queries this quarter. That is actually down by about 9% from ClientConnect in the first quarter of 2013, but is reflective of a dramatic increase in the Tier 1 queries from below 900 million to about 1.5 billion, as we said, while the rest of the world queries went down from 2.8 to 1.9. What you're seeing is a shift to Tier 1 countries and leveraging the advantages of our Bing contract. I'd add to that. Even in the rest of the world, you're seeing a shift to higher Tier 2 countries, where actually the yield of the RPM is still higher than some of the other countries we were focused on before.
As you look at managing the balance of queries, we're focused on, obviously, the different countries that have the highest RPMs, as well as where we can get the best distribution. It's a combination of those things, and I think we'll continue to work on that as we go forward, but we have multiple search partnerships that allow us to maximize the yield for our partners and help them make more money, and in turn, obviously, do the same for us.
Okay, thank you.
Thanks, Kerry.
We'll take our next question today from Dan Kurnos with Benchmark Company.
Yeah. Great. Good morning. Nice quarter, guys. Just a couple questions here. First, we had heard that there were some rumors out there that Google was withholding particular query data from certain partners. Were you affected by that at all? Secondarily, Josef, you did reference some browser changes coming up in either 2 Q, 3 Q. We know that Google has been pushing new clients towards their custom search ads platform and had heard from industry sources that Bing was likely to follow suit in six months. Is this what you're referring to, if so, does it require any technology changes, whether it's a shift from XML to Java? How disruptive might that be?
Sure. Thanks, Dan. Thanks for asking the questions. On the first one, actually, we don't feel anything, any changes on that side. I have not heard what you heard, about Google withholding anything. I can't really comment on that. We have a good partnership with them, we haven't been affected by anything, I don't have anything else to add. With regards to the browser changes, it's public information, obviously, that Chrome specifically, in their blog post, is making certain changes for the benefit of consumers, to make sure there's more transparency. As we said before, in the long term, we support all those things, we think that it's a good turn for the industry.
Although it might have a slight negative effect in terms of conversion and therefore queries in the short term, we do think that over time, now being one of the bigger players in the industry, the industry is still going through a transition. It started last year, still going through this year. We do think that this year will still be a transition year, we're actually bullish in the long term because of the basic fundamentals of the business, which is, most people on this phone call today still don't want to give their credit card to buy software, from whether it's on the mobile or on the desktop app, there are still software developers who still want to make money to put food on the table.
They still need partners, we're, I think, a very good partner with a good reputation in terms of servicing the needs of our partners, therefore, there'll always be some type of advertising, be it search or display, monetization opportunities for people like us to play a role. I think, what we've been focused on in general is assuming everybody's treated equally, in the industry, which we like we hope over time will happen, then we're well-positioned to be a long-term player in the industry. I think the industry reputation will get better over time, because consumers will understand, therefore the Chrome or the Internet Explorer or other browsers will be more than happy to work with anybody as long as the consumer acceptance is above board and with full transparency. I think the transition will hurt a little bit in some cases.
You're seeing that already today. I think we've been certainly aware of that. We're prepared for it. We're still working on those solutions, and I think from that perspective, long term, we're bullish. Although Yacov said there may be some weakness in the next two quarters. It's too early to tell from our standpoint. We obviously hope not, and we'll see how it goes, but we're still very confident about the full year. With regards to the technology side, Chrome published the way you can work with them. It's pretty clear-cut. It's API you work with them on, and I think it doesn't require massive changes on the technology side. It's just working with them and incorporating that into your flow. We intend to do that, I think as I mentioned before, if everybody else does that, I think it's better for the industry and better for consumers.
Got it. Thanks for all the color. Let me just follow up quickly on the monetization side of the equation here. I guess as we look out and understanding that none of us really have a crystal ball to how all these changes are going to play out, historically, there's been a pretty wide monetization gap. As these changes filter through, do you still expect the gap to be in place between Google and Bing? Is it closing? Have you seen any progress over the past six months with all these changes being made?
Yeah. I'm probably not going to go into too much detail on that, given the sensitivities of all of our wonderful search partners that we have confidentiality. I would say on a macro level, I think if market share for Bing and Yahoo continue to increase, then eventually they'll get more volume. More volume will lead to higher RPMs because more advertisers are interested in advertising, and that's just the way it works. If they don't, then I think the gap will remain relatively the same way it is today. I think the gap itself is made up of a few different variables, though, not just the RPM. As you know, it's based on conversion and a lot of other variables. I think today in certain countries, you're seeing that it is competitive between the different search partners and other countries, clearly there are still some leaders out there.
We like to work with all three and hopefully get the best deal we can by working with all three and working with all of them to optimize our business with them.
Okay, great. Thanks for all the color on that. I have a few more. I'll step back in the queue and let other people ask. Thanks, Josef.
Thanks, Dan.
Flipping on, we'll go next to Jason Helfstein at Oppenheimer.
Thanks. One point of clarification, then two questions. The first, just to go back to Kerry's question. You're saying that, by sometime the end of the second quarter, early third quarter, you would have some basically test cases from display advertising in mobile that you could effectively talk about. I just wanted to clarify that that's how you think about the timing around that?
We certainly hope so, yes.
Okay. Second, can you talk about how you think about return to shareholders? Obviously that can come in different ways. It can come through growth. It could come through buyback of shares. It could come through dividends. Ultimately, what you're asking shareholders to bet on here is that you can diversify the business into display, then into mobile. To the extent that will take time, just curious your thoughts about finding other ways to return capital to shareholders while we're waiting for those growth initiatives. Would you consider a dividend or potentially buying back stock once you complete the debt offering, there was more liquidity in the stock through potentially a secondary? The final question, can you talk about the timing of when you expect to receive all the full OpEx synergies, net of any investments from the Conduit merger? Thanks.
Sure. Thanks, Jason. Nice to have you on the call. With regards to your questions about increasing shareholder value and all the different variations. First and foremost, I think, our answer is probably going to be a little bit canned, but it's the right answer, which is, we always are exploring the ways of optimizing and increasing shareholder value. We look at all options pretty much at any given point in time, and we make decisions that we think over the long term do increase shareholder value. Specifically with what you've said, I'm not taking anything off the table today. I think what we're asking shareholders to believe is not a big leap. We're growing, even on a pro forma basis, by 10% in an industry which has had challenges and most other companies have not grown. We're growing.
We're using the cash we're generating, which is significant, and still showing significant EBITDA in the process to invest in a few other businesses. I think we're leveraging our core assets and core strengths. I think based on that, I think personally, it's a pretty compelling value proposition for investors. I think we've proven in the past that we do deliver over a period of time, and I expect the same thing here. If we augment that with some other financial instrument, whether that be a buyback or dividend over time, again, we're open to anything if it makes sense for shareholders and increasing shareholder value. We have nothing specific planned at this point in time. With regard to the last question, I have to remind me what it was.
Conduit synergies.
The Conduit synergies. Thank you, Yacov. We would expect, I think the full amount of synergies by the end of this fiscal year. We're ahead of schedule in a lot of ways, but there are certain bigger projects that take time. Obviously, as we mentioned earlier, one of those is clearly going to be moving into the new headquarters, which will be at the end of August. That will be the first time, well, since in nine months where we're all together. I can tell you just from an overhead perspective, it is expensive. We're traveling back and forth often. Also just from the synergies of different people and two different cleaning crews or all the different aspects of running two different operations, let alone the rent of two different offices, and other aspects when you're together, the synergies will prevail.
We think by the end of the fiscal year, we'll have pretty much most of the synergies that we've identified, finalized.
Just can you follow up on just a little more on that? I mean, effectively, what do we think the impact will be in, let's say, 15 of those cost savings?
The synergies came in regards to 2 things. 1 is cost savings, and 1 is revenue opportunities, both. We've said previously, but I think for this year, we believe, we're probably in the range of this year. It's in the numbers already as we see it, roughly around $7 million-$10 million of synergies on both the revenue and the operational side. I think next year, we probably continue to see in that same range as on a full run rate, hopefully by the end of this year, in the probably $5 million-$10 million, depending on certain aspects of the business that hopefully will happen. Could be on the higher end of that. If others don't, it's on the lower end of that. So altogether, probably between $15 million-$20 million of overall synergies.
Thank you.
Moving on, we will go next to Jay Srivatsa with Chardan Capital Markets.
Thanks for taking my questions. Congratulations on a good quarter and guidance. On the mobile side, Josef, could you give us some sense on what the timeline is for launching some of the products and when do you hope to start to realize the material revenues?
As I mentioned earlier, I think we have won some of the products already in a small beta testing. To fully roll them out, I'd expect end of Q3, early Q4. I mean, as you can imagine, it does take some time and obviously there's technology, but there's also partnerships and business development work that has to be done. I don't expect it to have any material impact on revenues this year. We believe in next year, as we grow, mobile will be the fastest-growing part of our business, which is probably not a really insightful comment because it's probably anybody's fastest-growing part of the business.
We think that's likely to be, and we hope to have two or three other things we're working on in mobile to share with you over time that will also help accelerate growth towards the end of this year into 2015, where the mobile revenues will be more significant.
Okay. In terms of synergies, Yacov, can you highlight what are some of the cost savings you expect to realize, and when does it start to hit the income statement?
Well, I think the synergies will come in two forms. First of all, we are planning, and as you saw through our guides, we're planning growth through the year. The larger company and the combination of the companies will enable us to achieve that growth with a smaller investment in expenses, thereby maintaining and even achieving a higher EBITDA ratio. That's the main point. The second one, though, is, as Josef mentioned, the mere fact that we'll be in one location, just as a matter of fact, the cost per square meter or square foot that we're renting in the new location is lower than either of the locations we're in right now. That we're able to, as I said, scale up the size of our offices without impacting on the bottom line.
There are numerous other examples of what we're able to achieve, whether that be in the rental, whether it be with car leases and other assets of the company, that we should be able to achieve come towards the end of the year and into 2015.
Thank you.
It appears we have no further questions at this time. I'd like to turn the program back over to our speakers for any additional or concluding remarks.
Thank you. As always, I'd like to thank the talented team at the new Perion for all their hard work and dedication in helping us achieve these great results. Together, we are poised to achieve great things as we transform Perion into a new company and deliver proven solutions to help application developers grow, monetize, and optimize their business, both on the desktop and in mobile environments. Stay tuned for more exciting news from us over the next few quarters. Thank you. Have a good day.
Ladies and gentlemen, that does conclude our conference for today. Once again, I'd like to thank everyone for joining us.