Good day, everyone, and welcome to begin. At this time, I'd like to turn the call over to Deborah Margoly, Perion, Investor Relations. Please go ahead ma'am. Thank you and we appreciate the attention of everyone who is joining us today. On today's call, management will be reviewing the financial results and business highlights of the Q4 full year ended December 31, 2013.
The press release detailing the results is available on the company's website at w w w dotferion.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 and as in prior quarters, the results reported today will be analyzed on a non GAAP basis, which management believes better conveys the operational stake 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 ks. With that, I'll turn the call over to Joseph Manderson, Chief Executive Officer. Joseph?
Thank you, Deborah, and good morning, everyone. Welcome to our 2013 Q4 earnings call. This was another record year for Perion with $104,600,000 of revenue, slightly better than our guidance of $102,000,000 to 104 $1,000,000 and $25,500,000 in EBITDA also beating our guidance of $24,000,000 to $25,000,000 We are very pleased with Perion's financial performance, resulting in a strong Q4 and a record year. But the performance of Perion on a stand alone basis is only part of the story. On January 2, we closed on the milestone acquisition of Clariantec, creating a new much larger company embarking on a new and exciting strategy.
On a combined basis in 2013, we generated over $400,000,000 of revenues and net income of over $100,000,000 More importantly, we are now a much stronger company 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. Parts of the industry have certainly had its challenges recently and like everyone else it has had an impact on us as well. That is why we view the acquisition of ClientConnect as a unique opportunity to actually lower our risk, gain real scale and emerge as a leading solutions provider in the app and software developer ecosystem. This ecosystem, which is the main driver of our business, remains and in fact is increasingly ingrained. One of the questions we get most frequently is regarding the industry's sustainability.
The question focuses on the search providers, the seemingly steady flow of changes in their policies and the overdependence on a few providers. We think it is important to look at the industry from the perspective of consumers and software developers as the core concerns of these 2 important constituencies have not changed and are what really drives business fundamentals. Consumers are less and less willing to pay for software either on the desktop or mobile, but developers of consumer software and apps needed to monetize their effort to fund their innovations. For developers, the ecosystem is broken. Distribution is difficult and monetization even harder, stunting innovation in the process.
We do not see these dynamics changing anytime soon and have positioned ourselves as the partner of choice, helping bridge the chasm for developers by providing real value in the ecosystem. We understand these needs firsthand through our own apps like eCreditmail, Molto and Smallbox and are therefore uniquely positioned to help others. The acquisition of ClientConnect has enabled us to firmly establish the foundation of our solution. Our life cycle management platform, which is still a work in progress, will essentially provide a comprehensive cross platform solution for app developers that want to increase their distribution, optimize the engagement of their users and of course monetize those users. Today, we are we largely utilize search agreements to create monetization.
In the coming quarters, we'll see display advertising play an increasingly prominent role in our monetization efforts and are working on monetization solutions for app developers as well. Regarding display advertising in particular, our newfound scale, the result of our combination with content gives us an advantage in the space. In addition, we have proven ability to collect and utilize data to maximize advertising yield, thus increasing the amount of revenue our app developers can generate through their offering. We have also built a powerful data repository and in this case of big data such a repository will add significant value. Simply put, the acquisition of ClientConnect affords us the ability to invest in broadening and deepening our offering for developers and facilitate our ongoing ability to provide great apps for consumers without charge.
In this way, we will aggressively move to differentiate ourselves in the industry, growing beyond the search dynamics that dominate the discussion today and emerging with a broader, differentiated and most importantly, even more sustainable platform. I'd like to elaborate on the investments and enhancements we have planned to augment this platform in the months years to come as it reinforced our leadership position in the industry. While the search engines continue to adjust their policies, industry changes growing stronger, larger and more profitable along
the way. There will certainly
be more changes and we'll continue to adapt. Our relationships with all of our search partners are stronger than they ever have been. Cardion had great relationships growing from 1 to 5 in the last year and client connect broad with exceptional relationships as well including preferred contractual terms. We'll leverage these relationships to the greatest extent possible and continue to ensure that we are insulated from the adjustments of any one search provider may make in the future. During 2013, our goal was to diversify our search revenue and we did so.
As I mentioned, we were highly successful in this effort and instead of 1 search partner in 2012, we now have 5. In 2013, no single search partner accounted for more than 38% of Perion's revenue. And we derived revenue from all 5 of our search partners Google, Bing, app.com, Conduit and Yahoo! Building on our successful search diversification plan, our goal in 2014 is platform and revenue diversification. We intend to significantly increase our revenue from display advertising and mobile during 2014 and beyond.
This is a marathon and we are patient and methodical. Having proven that we can execute against our goals, we are confident the same will be true going forward. While we pursue this evolution, we fully expect to increase our investment in the short term. Yet together with this increased investment as we announced in the guidance section of today's press release, we still project continued organic growth in 2014 with healthy profit margins. Our focus in 20142015 is to grow organically and through acquisitions, similar to what we have done in the past.
On the M and A front, we are focused on acquiring companies in the mobile and data driven advertising space and we are seeing excellent opportunities in the market. To effectively pursue this strategy and to minimize dilution, we intend to use mostly cash and to the extent required take on debt to finance these acquisitions easily supported by the cash flow of our business. As in the past, we expect that any acquisition of meaningful size will be accretive. Next, let me speak to the integration of Clyde with Clyde Connect as this is a significant and transformative project for us. I'm pleased to report that the integration is going even better than expected.
We have found the ClientConnect team to be enthusiastic, talented and ambitious, sharing our desire to make the new Perion a world leading company. I cannot express enough how impressed I have been with the talent and quality of our combined management team, their collaboration and equalist agendas as well as the blending of employees and cultures, which is something not to be taken for granted. Most acquisitions fail due to unsuccessful integration. And so far ours has done remarkably well. We are ahead of schedule on many items.
And from a strategic standpoint, we have identified numerous synergies and opportunities. Before I turn the call over to Jacob for a detailed financial analysis, let me add that our plans for 2014 in addition to the investments mentioned above include increasing marketing spend to gain market share and spur organic growth even further. These investments and recent changes with certain browsers are expected to have a modest impact on our revenue and EBITDA, primarily in the first and second quarter. As with previous policy or technological changes in the industry, we have embraced those that sincerely improve the user experience and transparency and have adapted and grown our business each time. As can be seen from our guidance, I'm quite confident that in 2019, the results will
be the same. Finally, since we
have a much larger team and 2 separate offices in Israel, we are relocating our headquarters to a single state of the art facility. This will result in some added CapEx approximately $6,000,000 in 2014, but we also expect that this consolidation will result in $3,000,000 in annualized savings beginning in 2015. In addition, we anticipate synergies as a result of having the entire team in one place. We expect the move to be completed by September of this year. With that, I'll turn the call over to Yaacov and then we'll take your questions.
Thank you, Joseph. I'll discuss the non GAAP results for Perion on a standalone basis and also to provide the pro form a non GAAP results for ClientConnect as received from Conduit. Revenues for Perion this quarter were $31,300,000 increasing 47% compared to the $21,400,000 in the Q4 last year. The increase reflected growth across all of our revenue streams year over year. Specifically, this increase was attributable to a 61% year over year increase in search generated revenues from $15,300,000 to $24,500,000 In addition, product and other advertising sales increased 12% from $6,100,000 in the 4th quarter last year to $6,800,000 this last quarter.
In the GAAP report, $14,500,000 of revenues generated by our agreement with Caduet, which was entered into before acquiring the ClientConnect business, were detracted as on a consolidated basis $11,300,000 were netted against customer acquisition costs and $3,100,000 were deferred. Total operating expenses including costs for Perion were $24,000,000 in the Q4 of 2013. Excluding customer acquisition costs of $14,600,000 these expenses totaled $9,500,000 reflecting an increase of 31% compared to the Q4 last year or an increase of about 1 half the rate of our revenue increase. As I just mentioned, in the Q4 of 2013, Perion invested $14,600,000 in customer acquisition costs, a significant sequential increase compared to the $8,200,000 in the 3rd quarter and also up 50% compared to the $9,700,000 in the Q4 last year. This reflects improved return on investment metrics experienced during the Q4, which encouraged us to tap investments to drive future growth.
We continue to increase our media buying and customer acquisition efforts in the Q1. And while this investment will have a short term impact on our EBITDA, it is a key factor in future growth. In our GAAP report, dollars 11,300,000 of these expenses were netted against revenues. Payout's EBITDA was $7,700,000 or 24% of sales in the Q4 of 2013 compared to $4,900,000 or 23 percent of sales in the Q4 of 2012. Perion's net income in the Q4 of 2013 was $6,400,000 increasing 77% compared to $3,600,000 in the Q4 of 2012.
Earnings per share this quarter was $0.49 per diluted share, representing a 53% increase from $0.32 in the Q4 of 2012. In the Q4 of 2013, the difference in operating expenses and COGS between our GAAP and non GAAP report was primarily due to the exclusion of $11,300,000 in customer acquisition costs related to revenues generated under our commercial agreement with Conduit, which was offset by $400,000 of non cash share based compensation, $2,300,000 amortization of acquired intangible assets and $2,800,000 onetime acquisition related expenses, so that a net total of $5,800,000 was included in our non GAAP operating expenses and excluded from our GAAP report. In the Q4 of 2012, expenses included in our GAAP report and excluded from our non GAAP report totaled $3,000,000 The GAAP net loss in the Q4 of 2019 inclusive of expenses just mentioned was $1,800,000 or 0.14 dollars net loss per diluted share compared to net income of $600,000 or $0.05 net income per diluted share in the Q4 of 2012. The one time expense of $2,800,000 related to the acquisition of Conduit's ClientConnect business alone represented 0.21 dollars expense per diluted share. Turning to the financial results for the full year ended December 31, 2013.
Total revenues were $104,600,000 a 71% increase compared to $61,200,000 in 2012. This increase was driven by a $38,500,000 or 101% increase in search generated revenues along with a $5,000,000 or 21% increase in our product and other advertising revenues. As mentioned in the quarterly analysis, in the GAAP report, revenues generated by our agreement with Conduit, which was ended until before acquiring the ClientConnect business, totaling $17,400,000 were detracted as on a consolidated basis, dollars 14,300,000 were netted against customer acquisition costs and $3,100,000 were deferred. R and D expenses in 20 13 were 13 point $5,000,000 in 20 12. As a percentage of sales, R and D decreased from 17% in 20 12 to 13% in 2013.
Looking forward, we intend to 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 year, excluding customer acquisition costs, were $9,100,000 compared to $6,400,000 in 2012. As a percentage of sales, these expenses have decreased as well from 10% in 2012 to 9% in 2013. Cut to acquisition costs for the year reached $46,600,000 compared to $22,100,000 in 2012. The increased investment was a significant factor in powering our revenue growth.
Our G and A expense for the year was $7,800,000 or 7% of in 20.13 included $1,500,000 of non cash share based compensation, dollars 9,300,000 amortization of acquired intangible assets, dollars 6,200,000 in acquisition related expenses and excluded $14,300,000 in customer acquisition costs related to revenues that were generated under our commercial agreement with Conduit for a net total of $2,700,000 which were adjusted for in the non GAAP numbers. In 2012, the adjustment of GAAP numbers totaled $6,700,000 For the year, EBITDA was $25,500,000 or 24% of revenues, up 82% compared to $14,000,000 or 23 percent of revenues in 2012. Non GAAP net income in 20 13 increased to $20,100,000 or $1.54 per diluted share compared to $10,300,000 or $0.99 per diluted share in 2012. For the year, GAAP cash flow from operations was 15 point the cash portion of one time acquisition expenses of approximately $5,000,000 As of December 31, 2013, we had cash and cash equivalents of approximately $23,400,000 up from $21,800,000 as of the end of last year. This represents approximately $1.07 per share in cash and cash equivalents.
With regard to ClientConnect, their business continued to perform well in the Q4 of 2013. Based on the pro form a non GAAP numbers we received from Canooit, ClientConnect 4th quarter revenues increased 29% year over year, reaching $84,100,000 EBITDA increased 11% year over year, reaching $17,300,000 and net income increased 29% year over year reaching $17,200,000 The lower EBITDA for the quarter was primarily due to the ramping up of customer acquisition costs in December, powering growth into 2014. For the year, ClientConnect had revenues of $325,500,000 up 52% compared to 2012. EBITDA was $96,800,000 also up 52% compared to $63,700,000 last year and net income for the year was $86,700,000 up 55% compared to the $56,000,000 last year. This concludes my financial overview.
Let me now talk about our 2014 outlook. For the full year of 2014, we expect revenues to be in the range of $460,000,000 to $470,000,000 EBITDA is expected to be between $125,000,000 $130,000,000 and net income is expected to be in the range of $103,000,000 to $108,000,000 As you can see and as Joseph said, we expect 2014 will be another milestone year in Parion's history and one that will shape its future for the next few years. With that, we will now open the call to questions. Operator?
Thank And we'll take our first call from Carey Rice with Needham and Company.
Thanks. A couple
of questions if I may. Joseph you talked about display advertising and increasing that. Can you maybe add a little color around how we expect to see that manifest? Is it through browsers or toolbars? Or where will that display advertising kind of show up?
The second question is you talked about numerous synergies with ClientConnect. One was the consolidation of facilities and you'll save $3,000,000 there. Can you talk a little bit about other synergies and if you can quantify those at all? And then finally you had talked about investments and obviously one is seems to be around display. I assume others are around increasing customer acquisition expenses to ramp revenue there.
Is there anything else in that investment increased investment that you can call out? Thanks.
Sure. First of all hi, Carey. Nice to have you on the phone. Hi, Jeff. I'll try to answer all three questions and take it where you're at and then Jaakon can add anything to add to these.
On display advertising, the way you'll see it manifest result, it will not come from toolbars. We actually don't expect toolbars to be something that's a meaningful part of our business towards the end of the year. And you'll see it mostly in 2 areas. 1, as I mentioned in our call, we have a lot of data. We are testing internally and I'm happy to say things are good results, but basically targeting retargeting and RTV inventory programmatic ad buying using our data.
And we think we have an opportunity there to really provide some value to advertisers because we have a lot of data which is not cookie based. So that's number 1. And we're in the test phases now. I will hopefully report on that progress throughout the year. And as we said in the M and A section as well, we'll look to do that organically and as well potentially through acquisitions to keep that up.
The second thing on display is we're looking to create some what I'd say exclusive type of inventory that we have to our reach with our app developers and our software partners. And we have some interesting ideas that we're experimenting with as we speak that can create new inventory. Again, that's fundamentally new IV type of standard inventory whether it's display or video and use again our data and our partners' ability and their reach to do some targeting either pre targeting or retargeting for that inventory, would not be open to everybody else. It's more like a I don't know what I would call it private exchange, but something similar to that. And we're working on that now.
We have a couple of things we're testing as we speak and hopefully next quarter I can update you on that as well. So that's specifically with display advertising really not related to about it all, it's more related to data as a foundation of how we can grow another revenue stream that's not dependent on search partners. With regards to synergies, so as you mentioned, I think there's the Agba synergy is clearly the location. The other synergies we have we'll probably fit in 2 buckets. There are revenue synergies.
So as I mentioned I think we mentioned this when we acquired ClientConnect and we just mentioned it now, they were bigger than us and they had better terms with some providers. So we are certainly looking to leverage those terms and to pick up some margin and revenue by looking at those type of It's in the I mean, we're not quantifying it specifically, but it certainly adds in a few 1,000,000 of dollars to what we're doing this year. The other synergy is really our people synergies. And a big example there is to really grow the business, we were looking at this year probably adding between let's say it 50 to 100 new employees. We because of synergies between the two businesses, we're probably going to be adding most closer to 30 to 50 rather than 50 to 100.
And that's basically by realizing those synergies, we had 2 people working on, for example, distribution for toolbars or distribution for our other monetization products. We consolidated that and that's actually already happened into 1 group and we freed up the other group to invest in new things. And that leads me to your third question, investments. And those investments we are working on I'd say 2 to 3 major projects internally. One of which I'll tell you today and the other 2 we're not telling yet, but we're excited about them.
One is on the advertising side I mentioned already in terms of data driven advertising, programmatic advertising business. The other 2 are centered around mobile. And we have some interesting and unique insights to what we can do there that we think we're uniquely positioned to add some value on the cross platform distribution side specifically. And then lastly, on the desktop side in the existing business, we believe there is still opportunities to really invest in some new projects that will provide our partners with alternative revenue and analytics solutions. And those two things we think will help them increase their LTV, which subsequently allows them to spend more money, hopefully, with that as their partner.
And those are things which we really put into play this year from an investment standpoint. Great. Thank you so much. Thank you, Gary.
And we'll take our next question from Dan Kurnos with The Benchmark Company.
Yeah, great. Thanks for taking my questions. Joseph, just a first just quick one on core Perion. Just curious how those products are developing and what growth you're forecasting or embedding in your guidance for 2014?
Sure. So I think we've done that Incredible, Molco and Smartbox, correct? Yes. Yes. Modest growth.
They're actually good profitable businesses for us. They've done nicely. Obviously, given the size of the business now, it's a very small piece of the business. Frankly, even if we do it 100%, it'd still be a small piece of the business. So we have good, modest growth and very clear we're keeping the profit margins very good.
And what we're really doing is we're leveraging those applications to really help us and we think it's a unique advantage we have. We've been working now I forgot to mention on Carrie's question, but it's a good example of synergies. We're actually providing a lot of insights to the ClientConnect team about what it means to be an app developer because we are 1 and how to tweak and improve some of their systems and solutions for app developers. So we're actually not only growing those businesses modestly, we're actually using them as a great feeding ground to help us really collaborate to align and improve our product offering to our other business partners.
Great. That's helpful. So let me drill down
a little bit on a couple of
things you said. First, just from
a high level perspective, could you give us
a little bit more granularity on sort of the breakdown by bucket between search product and I guess otherdisplay that you expect revenue to come from in 2014? And then you did mention that you've got some projects internally. I was curious if you could give us an update on how Guardia is performing and just whether or not we should expect similar sized launches and over what course
of the year? Yes. Let me start with the Guardian discussion first. Actually because of the merger and because of the focus of the business, we actually decided not to focus on Guardian's going forward. A difficult decision to make, but as I'm sure Dan, when you're running now a $400,000,000 to $500,000,000 business, you're going to make different decisions.
And we just felt that Guardian was something that wasn't going to be the same revenue potential in the larger context than we thought as a standalone carry on. So kind of we got off the ground, but before we really got off the ground in a major way and we had put even more investments in it, we actually decided to kind of focus on other things. So and I assume that will happen going forward. We do some things testing out. In Cardio specific case, really was a result of together, it was just not there where we're going to focus on.
With regards to the breakdown of revenues, at this point in time, we're not going to give a breakdown of revenues specifically, but what I think you've seen in the past from us Ben is we like balance. So we certainly intend to create a better balance of our revenues between search and other revenues, advertising and product throughout the course of the year. And I think by the end of the year, I think you'll be pleased with the progress we've made on that balance.
And in terms of the product rollout schedule over the balance of the year?
Well, I mean, in terms of I mean, SmartBox actually in terms of SmartBox and Multifil again?
No, really just more organic development of things like Guardius.
The whole products. Yes. So I mean our focus clearly is more on creating products and solutions for our partners as opposed to creating more consumer apps. So again, we like having them consumer apps because they do add a big advantage for us and we're leveraging the knowledge. What we'll see over the next in Q2, we should have a couple once again right now we have a proof of concept product out there on the advertising side, the programmatic data driven advertising, I mentioned that.
And we have at Mobile World Congress in Barcelona last week, we unveiled a mobile monetization product that we're again testing. It's not for major release, but we're testing it out with a few beta partners. And so far we're encouraged by the reception we're getting there. And then in Q2 and Q3 is when you'll see some major releases of some new initiatives that I mentioned earlier with regards to mobile and advertising. And frankly, even on the desktop service side of the business, we have a few new initiatives we're doing.
And we expect in Q2, Q3 to give you more color on those.
Great. And then just one last one for me. Joseph, I'd love to hear your thoughts on Google at least delaying the renewal of the mobile portion of their deal with Blucora and how you think that the search partners in general are approaching mobile monetization?
Sure. So I'm not going to answer the specific question. I'm sure you could ask Bill at Blue Coat and he'll give you the answer. From our perspective, I'd say one is I never had mobile in my Google contract, so it wasn't an issue for us. We do have this in some other contracts.
In fact, Molto is using Bing, how does Bing on the our Molto product in on Android and on iOS. I think in general, and I think this is the more important part of your question is, I think the search providers are going to be very, very cautious about opening up the kimono, so to speak, to all sorts of partners on the mobile platform with regard to search. We're seeing that today. And I think they're trying to, I guess, learn from their desktop experience. They're trying to be much more methodical and deliberate about how they do that.
I do think at some point in time and I think we just the other day, 2 weeks ago, we if you read in the papers, the EU is doing an investigation on Android and some of their policies with regards to locking up a lot of manufacturers on what you could do with search. So if I look at the future, I think the search partners probably in their minds correctly so are making sure the ecosystem for consumers is not going to be littered with a lot of what they would think is not good practices. By the same token, I think they'll be balanced out by at some point in time, it's hard to argue that some companies aren't like other big, let's say, almost monopolies out there that also restricted competition on certain platforms. So I have some faith in the governmental agencies that at some point in time they'll make sure the competition is free and fair. And until that happens, we're focusing on a lot of other things for our partners, our app developers and we're excited about the future.
And search remains a big part of our desktop business. I do not think it will be a big part of our mobile business at least in the near term.
Got it. Great. Thanks for all the color, Joseph.
Thanks, Dan. And we'll take
our next question from Jay Srivastava with Chardan Capital Markets.
Yes. Thanks for taking my question. Good results and guidance, Joseph and Jacob.
Thanks, Jay.
Sure. Actually, specifically related to Google and if or are there other factors in place?
Sure. Actually specifically to Chrome. So it's actually it's not Google Search side of the business. It's the Google Chrome side of the business. I'm sure many of you are aware on the phone that Chrome has announced a policy change whereby they are limiting the type of extensions and add ons you can have in on Chrome.
It has to go through the Chrome store. Number 1, it has to be a single purpose extension. And anything that is not, they plan to shut off by June. Actually, it was supposed to come out early. They delayed it.
I think it's now there's 2 components for now in June. So number 1 is that will mostly have an impact on our tail, which is why we said revenue and EBITDA because it will have an impact on us. We think we've taken into account in our numbers, but that will depress EBITDA modestly in Q1 and Q2 depending on when it's rolled out. The other change that Google Chrome has made is Google Chrome also launched a pop up that they're popping up to consumers that is saying, Someone change your settings. We don't know who is delivering or not.
Click here to reset your settings. Of course, when it resets it, it goes to the factory options, which lo and behold is google.com. So that one, we have seen some impact in Q1 already. It seems to have stopped for now. They haven't said anything else about it.
So we're looking at those as in the past. We've adapted to all the changes that are going on in the industry. Again, some of the changes I agree with. And as I said, anything that sincerely improves the consumer experience one favor of. I'm not sure I agree with everything that's going on, but it's not for me to say, for me to adapt to and we've done that very well and we'll continue to do that.
All right. Switching to the mobile side. At a higher level, could you give us some sense of what the business model is going to be for you? Is it going to be search driven stuff? Or are you exploring other partnerships with service providers or app developers to figure out ways to monetize it?
Just kind of just sketch the landscape for us on how you see yourself playing in the mobile space and how that market is going to evolve as we go through 2014?
Sure. First of all, I'll start by saying the mobile space, it really I've been in the industry now 22 years. I've been in Opel 1.0, so I got my scars there already. The industry really the cycle repeats itself. This reminds me of the early days of Web 1.0 and then Mobile 1.0.
I do think 2014 2015 will be the years of consolidation. So I do think there will be opportunities for us on the M and A front. And I think this is the year that I think some of the winners will clearly be defined. The way we see it going forward, Jay, is that we intend to take what we're really good at as a combined company on a desktop and take it to mobile. And that primarily means helping other developer app developers monetize their products primarily through advertising.
I do not think search today will be a huge part of the business. Again, over time, I think that will change. But in the short term, I do not think it'll be a major part of the business. But we do think that advertising, display or video advertising will be a significant part of the business. And if we look at the skill set to bring to the table and the resources, we're very confident that we have what it takes.
And in addition to organic stuff, as I mentioned, we're also looking to augment that with some G shaped acquisitions. And we'll update obviously all of you when and if that happens.
Thank you. Thanks,
Jay. And we'll take our next question from Jay Kumar with Mid South Fund.
I'm sorry, we couldn't hear you. Can you repeat that again? What's going to be the outstanding number of shares going forward diluted? We're expecting approximately 70,000,000 shares as we enter the year. That number could go up through the year.
So we're looking at a range for the year of anywhere between 70,000,000 and 73,000,000 shares. All right. Thanks guys. Thank you.
And at this time, I'm showing no further questions.
I would
like to turn the conference back to management for any additional or closing remarks.
Thank you. This is the dawn of a new year for Perion, an exciting time as we evolve into a company that enables innovation across thousands of app developers on the desktop and mobile platforms. We are tremendously excited about these opportunities and the integration is going very well. As a new, larger and more profitable company, we have the resources to fuel continued organic and inorganic growth. As always, I'd like to thank the great team we have at Perion, including our newcomers from ClientConnect for their hard work and dedication in helping us achieve these great results.
Thank you and have a good day.
Again, that does conclude today's conference.