Good day, welcome to this Perion conference call. Today's call is being recorded. At this time, I'll turn the call over to Ms. Deborah Margalit. Please go ahead.
Thank you, 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 second quarter and first half of 2013. 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 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'll turn the call over to Josef Mandelbaum, Chief Executive Officer. Josef?
Thank you, Deborah, good morning, everyone. Welcome to our 2013 second quarter earnings call. As usual, I'll begin with remarks about the quarter and provide some color on our operations, Yacov will review our financials in more detail before opening the call up to questions. The second quarter was highlighted by great year-over-year growth in both revenues and EBITDA, as well as strong cash flow from operations. Revenues grew by 99%, EBITDA by 61%, cash flow from operations grew to $6.8 million from breakeven last year. These results were achieved through a healthy mix of organic and acquired growth resulting from our acquisition of SweetPacks last November. Operationally, the second quarter was highlighted by the successful diversification of our search business, the development of new products such as Guardius, which was launched last week, as well as continued optimization of IncrediMail and Smilebox.
When we announced our SweetPacks acquisition last November, we said that one of the main benefits, in addition to the economics, was scale. This has certainly proven to be true and was the main driver in our ability to close 4 additional search distribution partnerships in the past seven months. We have transformed our search business from total reliance on Google to one where we have partnerships with Bing, Ask.com, and most recently, as you heard today, Yahoo and Conduit. This has proven to be especially important given the recent industry trends as a result of policy changes earlier this year. In the second quarter alone, our search diversification strategy resulted in Google accounting for 51% of search revenues, while Bing and Ask combined were the same. Let me address in slightly more detail the search side of our business.
While our search revenue increased 183% year-over-year, it was down sequentially, as we expected and discussed on our first quarter earnings call. The main reasons behind this are the aftereffects of the Google policy changes last November and this past February, heightened competition in the application download environment, and some execution delays in the implementation of our additional search partnerships. The industry is in a state of transition following the policy changes, and we expect this to continue through the third quarter. A byproduct of these changes is that the distribution environment of third-party apps has become more competitive. In the short term, this translates into higher pricing and more aggressive practices, putting pressure on margins. As I mentioned last quarter, this isn't the first time the industry has been in transition following policy changes.
In fact, it has happened twice before, and each time it has taken two to three quarters before accelerated growth returns. We are confident the same dynamics will play out this time as well. The reason is actually simple. Macroeconomics always wins out. There will continue to be a strong demand for downloading applications, continued resistance from consumers to pay for the majority of them, and the need by developers to monetize their work. Finally, our second quarter results were impacted by certain execution delays in launching our new partnerships. Although these delays will also affect our third quarter, we are now ramping up our marketing efforts and will return to sequential growth in the fourth quarter of 2013 and beyond. Turning to the product side of our business, Smilebox and IncrediMail are performing very nicely, and we continue to invest in their mobile expansion.
We expect to launch an iPhone version of IncrediMail and Android versions of both Smilebox and IncrediMail by the end of the year. While we're only at the beta stage, we are very excited about Guardius' launch. This product is designed to facilitate better browsing through the wisdom of the crowd. Our Guardius product enables users to manage and control the numerous add-on extensions that have been installed on their web browser. Users are presented with a graphic display showing how much faster their browser will become once they disable specific apps. In order for them to make an educated decision regarding whether to keep or disable an add-on, we inform them what other users have done with these add-ons. TechCrunch, The Next Web, and Tech Investors News. We will update you on our progress on future calls.
With that, I'll turn the call over to Yacov and then take your questions. Yacov?
Thank you, Josef. As Josef just mentioned, in addition to the operational and strategic achievements, this was a very good quarter from a financial standpoint as well. Revenue this quarter was $24.4 million, nearly double the $12.3 million in revenue the same quarter last year. This increase reflected growth across all our revenue streams year-over-year, reflecting organic growth, with added growth coming from our SweetPacks's acquisition. Product and other advertising sales were $6.3 million, compared to $5.9 million in the second quarter last year, reflecting 6% growth. Gross profit in the second quarter of 2013 grew both nominally and as a percentage of sales, reaching $23.3 million, more than double the $11.5 million in the second quarter of last year. This reflects an increase in our gross margins to 95%, compared to 93% of sales in the second quarter of 2012.
In the second quarter of 2013, GAAP gross profit was net of $1.9 million, amortization of acquired intangible assets, which were not deducted from our non-GAAP gross profit. In the second quarter of 2012, the difference between gross profit in our GAAP report and that in our non-GAAP report totaled $0.6 million. Total operating expenses were $19.4 million in the second quarter of 2013. Excluding customer acquisition costs of $12.5 million, these expenses totaled $6.9 million. This represents a 34% increase compared to the same expenses in the second quarter of 2012, demonstrating the continued leverage of our model as revenues nearly doubled. EBITDA was $4.3 million in the second quarter of 2013, compared to $2.7 million in the second quarter of 2012, increasing 61%.
In the second quarter of 2013, GAAP operating expenses included $0.2 million of non-cash share-based compensation and another $0.5 million amortization of acquired intangible assets for a total of $0.7 million deducted from our non-GAAP operating expenses. In the second quarter of 2012, expenses included in our GAAP report and excluded from our non-GAAP report totaled $0.4 million. Net income in the second quarter of 2013 increased 85%, reaching $3.4 million, or $0.26 per share, compared to $1.8 million or $0.18 a share in the second quarter of 2012. The EPS increase was lower than that of our net income due to the increase in the number of fully diluted shares to 13 million from 10 million in the same quarter last year.
Turning to the financial results for the six months ended June 30th, 2013, total revenues were $52 million, a 121% increase compared to $23.6 million in the first half of 2012. This increase was driven by a $26.5 million, or 222% increase in search-generated revenues, along with a $1.9 million, or 17% increase in our product and other advertising revenues. Gross profit in the first half of 2013 increased 126% to $49.7 million, or 95% of revenues, compared to $22 million or 93% of revenues in the same period in 2012. In the first half of 2013, GAAP gross profit was net of $3.7 million, amortization of acquired intangible assets, which were not deducted from our non-GAAP gross profit. In the first half of 2012, the difference between gross profit in our GAAP report and that in our non-GAAP report totaled $1.4 million, including a $0.9 million difference in revenues.
R&D expenses in the first half of 2013 were $6.2 million, compared to $5 million in 2012. As a percentage of sales, R&D decreased from 21% in 2012 to 12% in 2013. As we look 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, excluding customer acquisition costs in the first half of 2013, were $4.3 million, compared to $2.7 million in 2012. This increase resulted from adding to our marketing staff from the SweetPacks acquisition. As a percentage of sales, these expenses have decreased as well from 12% in 2012 to 8% in 2013. Customer acquisition costs in the first half of 2013 reached $23.9 million, compared to $6.5 million in 2012.
As you know, this is a forward-looking expense and as such, will contribute to the revenue growth projected for the remainder of 2013. G&A expense was $3.8 million, or 7% of revenues in the first half of 2013, as compared to $2.9 million or 12% of revenues in 2012. GAAP operating expenses in 2013 included $0.7 million of non-cash share-based compensation and $1 million amortization of acquired intangible, totaling $1.7 million, which were adjusted for in the non-GAAP numbers. In 2012, the adjustment of GAAP numbers totals $1.3 million. In the first half of 2013, EBITDA was $12.2 million, increasing 128% compared to $5.3 million in 2012, despite the $17.3 million increase in customer acquisition costs. Non-GAAP net income increased in the first half of 2013 to $9.1 million, or $0.71 per share, compared to $4 million or $0.40 per share in the same period in 2012.
In the first half of 2013, GAAP cash flow from operations was $14.3 million, compared to $2.5 million in the same period last year. As of June 30th, 2013, we had cash and cash equivalents of approximately $30.4 million, up from $21.8 million as of December 31st, 2012. As Josef mentioned, we are working through implementation delays with new search partners and adjusting to search policy changes. However, we continue to expect a record year with significant year-over-year growth. Given the current industry trends, we have decided to provide an outlook for the third quarter. That being said, we are not committing to provide quarterly guidance in the future. Looking forward, we expect third quarter revenues to be between $20 million and $22 million, reflecting a 30% year-over-year growth, and EBITDA to be between $4.5 million and $5.5 million, reflecting 32% increase year-over-year.
At this time, we remain optimistic we can still achieve our full-year guidance. This concludes my financial review. We will now open the call to questions. Operator?
Ladies and gentlemen, if you would like to ask a question, you can signal by pressing the star key followed by the digit 1 on your telephone keypad. Keep in mind, if you're using a speakerphone, please make sure the mute function has been released to allow your signal to reach the equipment. Once again, star 1 for questions. We will hear first from Kerry Rice with Needham & Company.
Thank you. Just a couple of questions on search. I guess the first one is, it looks like that the Bing and Ask search partners have been launched given the growth of revenue driven by those two. Can you talk a little bit about maybe the timing regarding Yahoo and Conduit and maybe what you expect the search revenue mix to look like exiting 2013? Thank you.
Thanks, Kerry. With regards to Bing and Ask. To be precise, Bing was fully launched already in Q2. Ask really was towards the very end of Q2. Really Q3, we're still in the midst of working on optimizing ask.com. We're very optimistic and bullish about that. It's a great partnership and it's working very well in terms of relationship, but we're still not fully running with ask.com into Q3. In terms of Yahoo, we just launched also recently with Yahoo. We have some testing we're doing and probably in the next, hopefully, few weeks, we'll be up and running with them as well. One of the important things, and I'm glad you asked the question, is from our standpoint, we went from one search provider, and we were working with Google for, I don't know, eight years.
All our systems and all our processes were designed to work with them. We're adding on two almost new partners each quarter. It takes a while to ramp up, frankly, to do testing, to get the history about the LTV and the ROI, and actually just technically working with them and with our other partners. It takes a while, and frankly, longer than we expected in some cases, and we're working through that as we go. As Yacov and I said, that's one of the biggest issues in terms of pushing out our results a quarter. With regards to what it looks like at the end of the year, I would expect that probably a very well-balanced mix. I think you probably have in the range of 15%-20%-25%, and some will be a little higher.
I think it depends on who's stronger in certain territories. You should see a pretty good mix. We're going to look to optimize, obviously, for yield. We'll certainly have a much better feeling for that over the next two or three months as we conclude a lot of our testing, get the history we need to kind of predict accurately the LTV, as we have done with Google in the past, and we're doing now with Bing. That's one of the reasons why we've given the outlook for Q3, but also very confident that we'll have returned to significant sequential growth in Q4, which will lead us into a very strong position for 2014.
Would you mind just commenting on your partnership with Conduit? Is it a kind of a different partnership than with your other search partners, or do we kind of see that providing the same kind of search results, or can you just talk a little bit about that partnership?
Sure. As you look, I think Ask and Conduit are similar in the sense that obviously both of them use other search engines, whether it's Google or Bing. Both of those are some of the largest players out there. Conduit has proven itself to be an excellent company, executing very well over the past few years, and has frankly got great results from everything you read. From that perspective, we're excited to work with them. I think in general, with all of our partnerships
Looking at different types of business models to go forward. It's not necessarily only with one partner. As we look forward to that, some of it is looking at, frankly and Kerry, adjusting the risk-reward ratio of the partnerships, so that in a lot of cases, what has happened historically, and this is, I think, a changing trend in the industry. Historically, someone like a Google gave a rev share type of deal to somebody, and then someone like us took all the risk in down the road partnerships. As you start doing more third-party distribution, I think some of those deals are changing so that there are different business models that have a different risk-reward ratio. Some of it may be recognition of immediate payments on certain things versus only rev share, some is a combination.
We're trying to be creative as the industry changes to change with the industry, and one of the reasons why we're confident about Q4.
Thank you very much. We'll now hear from Jared Schramm with Roth Capital Partners.
Hey, good morning.
Hey, Jared. Good morning.
Looking at customer acquisition spend, it's $23.9 million in the first half of the year, are you still looking for north of $50 million in total CAC spend for 2013? Do you think that'll be evenly spread out between Q3 and Q4?
The answer to the first thing is, in general, yes, we see $50 million, absolutely not. Q3, the customer acquisition spend will be down from Q2. As I mentioned to Kerry earlier, I think, Jared, you know this. We've always been very prudent. We're not going to spend money recklessly. As we got delayed in launching some of these partnerships, it does take time when you launch the partnerships to make sure that you're optimizing your ROI and making sure you're getting a return on the money spent. Therefore, we will not be spending as much customer acquisition spend in Q3. That's one of the reasons why the revenues are a little lower. Obviously, as we go into Q4, we expect to fully be beyond that and into growth mode again in Q4.
We expected heavily spend in Q4, assuming all the numbers, right now we're seeing good trends, we're optimistic about that as we go forward. We still expect to be very close to the $50 million, it's going to be back in terms of back half of the second half loaded.
In this quarter, 51% of search revenues were derived from Google. Looking into 2014, how do you expect the mix to look as far as search revenue contribution is concerned?
I would say unless Google does some significant changes to their policies, Google will be in low double digits, maybe even single digits in 2014. I think if you look at all the public companies in the space who have announced the results, I'm extremely confident all of them are seeing the exact same thing. The policy changes that Google has implemented certainly had a desired effect for, I guess Google, and Google announced it publicly on their earnings call as well, that they are certainly seeing a decline, and that's been their choice. I think that you'll see that shift as it has been shifting with all the public companies out there to Yahoo, Ask, Bing, and people like Conduit.
Can you just give a little feedback on the initial reaction to Guardius? I realize the launch, it's pretty early on, but as far as your optimistic outlook for what you're seeing there and how you think the market will take to it.
Yeah, thanks. I think one of the things we've been working on with Guardius, and I think is really planning for some of the industry trends we're seeing today. We spend a lot of time working on that. So far, we have, I think, about 15,000 beta people who have been using the product. I'd say with probably an engagement rate in upwards about 40% of those are actively using the product. What we're seeing is that we're getting great feedback that it's really helping them improve their performance and some of their privacy of what's been on their computers that they didn't know about or they forgot about, that either slowed them down or frankly, is gathering data about them that they didn't want. We're optimizing it now.
We just really opened it up to more people as we did the official launch a little over a week ago. One of the things which we will do over time in the next couple of months is we will introduce to that a monetization play that says, let us help you manage your search so that, in fact, don't leave it to somebody else to take it without you knowing and to have an add-on and put it on there. We want it to be active. It's as almost as opt-in as you can get by being in your face and presenting it as a value-added product versus sometimes what has been known to happen in the industry is more of an after effect where someone doesn't realize something's happened to them.
Are you planning on launching a specific ad campaign targeted at getting users on board with Guardius here, or just going to let it play out as you have some of the other products?
We'll do a mix. We're certainly going to do some testing with acquisition marketing and overall marketing for it in probably the next two months. We're really beta launching now to get better feedback, optimize it, kind of make some changes based on consumer feedback. We'll probably take some of our marketing spend we would have spent on other things and put it against Guardius and hoping that it improves the LTV and helps us get a better ROI.
Lastly here, just in regards to the acquisition space, what are you seeing right now from your end as far as nice targets out there that you could tuck in as far as property-wise? Do you think valuations are going to get a little loftier right now? Just maybe some quick color on what you're seeing in that space.
Actually, what we're seeing, I think before, we're actually seeing a pretty healthy pipeline. You're right. There are some companies that are, in our opinion, probably, at least for us, a little overvalued, and we're not going to go after them. We're looking at accretive acquisitions, and we've seen a pretty good pipeline. I'd say what in general we see is that fundamentally, as always, it takes two to tango. We've had a couple of things that to begin, they were close. At the end of the day, we're being very disciplined about what we think is the right acquisition for us at the right time, and we're being focused on that. We have a good pipeline, and we certainly still hope that by the end of this year, we will have announcements to make about acquisitions.
Okay. Thank you.
The next question will come from Daniel Kurnos of The Benchmark Company.
Yeah, great. Thanks. Good morning. On the policy side, just a quick question. It looks like IAC sort of hit their reset button in Q3, reflecting the timing of the Google policy implementation. Josef, is this having any impact on your Ask business, and was the timing really unique to IAC in terms of their Google policy agreement?
I'll start with the second half. Obviously, I'm not privy to the contract with Ask.com. I don't know Google specifically, but from the marketplace, I can tell you, yes, the Ask implementation of the Google policies was five to six months after everybody else's, just from what I know from being in the industry. I do not know that from a contractual or factual standpoint. Certainly, that had an impact in terms of the industry and just the competitiveness of the industry when everybody else had to go to one set of policies, and you had partners out there with a different set. Certainly made ROI a little bit harder, obviously, from that perspective. With regards to going forward, again, you have to ask Ask specifically about their products.
I can't comment on that because we have a contract with them and confidentiality, but there are still some things that because of the size and nature of their relationship, that the Ask will still have some advantages. One of the reasons why we partnered with them is we fully expect to work with them to take advantage of those advantages they have in the long term. As for when it takes effect officially, as you did mention, it took effect in July of this year.
Got it. Great. Then just a quick one again on search. Has Google's enhanced campaigns had any impact, end results or the marketplace in general?
We're not seeing a ton of change from the introduction of enhanced campaigns thus far. I think it's pretty standard, and I don't really have a big concern on the monetization front. We know about it. We haven't seen a huge change at this point in time. I'm not saying it won't happen, I don't think it's been a big issue at this point in time.
Just one follow-up on the acquisition side. You talked about maybe having something to tell us by the end of the year on the acquisition front. You're still looking to potentially make an acquisition this year, or that would be more of a 2014 event. I'm assuming that your guidance doesn't include any impact from any projected acquisitions, correct?
Our guidance does not include any impact on acquisitions. The answer is we are looking to make still acquisition in 2013. Yes.
Just one more from me. On the mobile front, now that you guys are launching iPhone versions for Smilebox and IncrediMail, maybe talk about the path to monetization there and how big an impact on revenue you think mobile could be for you guys in 2014. Thanks.
Sure. I don't think monetization is going to be a huge impact on us in 2014. I do hope we will start seeing a little bit of monetization in 2014. The answer, I think, is the standard answer. I hate to sound like a broken record. There's advertising. We have deals in place already to when we have enough traffic to kind of make some modest income from advertising. Today already, for example, on our iPad product with IncrediMail, we have Bing search baked into our product on IncrediMail. We have experimented with in-app purchases. As we mentioned earlier, all this at the end of the day, we're focusing on getting to scale first, getting enough overall downloads, enough install base, and active users. As the mobile market matures, we'll be in a position to take advantage of it, like, frankly, everybody else.
I don't pretend to be a market maker in the mobile space. What we believe we are is we can create compelling products that have value to users, and if we do that and get enough of them to use it, we'll be in a position to make money.
All right. Great. Thanks, Josef.
Thanks.
Now we'll hear from Jay Srivatsa with Chardan Capital Markets.
Yeah, thanks for taking my question. Josef, if I look at your Q3 guidance and your full year number, it appears to me you would have to have a very strong Q4, as much as roughly $37 million if I take the midpoint of your Q3 guidance. Help us understand, what gives you the confidence you're going to see such a big jump in revenues in Q4, given the environment you've painted for us currently?
First of all, thanks, Jay, for joining the phone call. I think everybody on the phone call knows myself and Yacov. There's no question. First of all, I'll answer the question directly. We have, obviously, now multiple partnerships we just invested in. We are launching them as we go forward. We have some history now as we get more familiar with them in the marketplace, and we are seeing the marketplace evolve and transition. I think as, frankly, anybody else in the industry reported their numbers, everybody's saying the same thing, which tells you what we're saying, which is Q3 will still be down from Q2, and Q4 is expecting to go up. I think the reason, Jay, is relatively simple.
At some point in time, we've seen this before, as I mentioned, with the past two changes that Google has done over the last four or five years, it takes a while for the market to adjust. There are small companies today, without giving names, who have approached us to be bought. We've said no, and they're approaching to be bought because they're not going to be able to survive. As we think, as the business, frankly, transitions and stabilizes, the bigger players will be in a better position. With now four new deals added, we think we have a unique ability, which most other companies don't have, four, to increase the yield on the monetization as we go forward. That's answer number one.
Number two, as that increases and as the overall increases, Q4 is a better quarter for us in terms of our product and advertising revenue, we see that coming. Last but not least, as I mentioned earlier, to respond to, I think, Kerry's question, we are certainly adjusting the type of deals we do, and to allow us to scale the business faster and with a different risk-reward ratio. There are certain things that we think we can see through partnerships that can allow us to grow the revenues and the profits at the same time into Q4. I think if you look at the numbers, Jay, on the profit side, it's not a big stretch from where we were in Q1. On the revenue side, it is certainly a big jump.
We understand that, which is why Yacov and I both said we're optimistic we can hit our numbers for the full year. There's no question we are a little bit of a delay, more than we expected, I think we are being transparent, as we always are with you and with everybody on the phone. Can't say I'm extremely happy about that, to be candid, also, the industry is changing, it's going through a transition, which some of it we predicted, some of it is not as we predicted. At the end of the day, though, as I said earlier on the script, the macroeconomics still play out here. We actually don't see a decrease in number of downloads.
We're not seeing a decrease in the number of people or an increase in the number of people who all of a sudden want to take out their credit card and start paying for applications. As we see the market rebound and the industry rebound, we think we're well-positioned then in Q4 to have a great quarter.
All right. You mentioned execution delays during the quarter. I suspect it's because of the systems being a little different with your existing systems for Google versus the Yahoo and the Bing. I mean, sorry, the Bing and the Ask. As you look ahead, now that you're absorbing Yahoo into the fold, are you feeling comfortable with how you're set up to not have any more delays, or is that a concern for you as we look ahead?
The delays are not a concern for me as we look ahead. Each partner by itself, just to give you an understanding, for example, everybody has their own set of policies, just as an example. The way that the general flow works is you sign a contract, you start working with the account teams and the technical teams, and then basically they give you some technology that you include in your products and your installer. We do QA on it to make sure it actually works the way it's supposed to. We send it to the other party. The other party does QA on it, and then we send it back to us.
If we work with other third-party distributors, we send it to them, and that whole process repeats, and they have to make sure that the information gets sent to the database in the appropriate way and that, in fact, you're adhering to the policies of now all the different partners out there. What I just described, just physically, takes one to two months. There's just no shortcuts. I think so, I don't expect delays because of anything internally, where there were at the beginning, as we mentioned.
I think now it's just the normal process of what it takes to get a partner up and running, which again, is one of the reasons why we decided to give a Q3 outlook, which we usually do not do, and we don't intend to do going forward, because we wanted to be more open and transparent with people who don't understand how the operations work of getting our partners. Going from one to five partners, it's a lot of work to do, and honestly, the team here has done a great job in actually working almost day and night to try to get us as fast as we can. There are limitations of just what physically can be done. We're excited about the partnerships we have.
We're very happy to work with all of them. We think that they will yield good results going into Q4 and beyond.
All right. Last question from me. In terms of competition, you mentioned third-party apps. Can you paint us a little bit of a picture on how you see that playing out going forward? Do you see it intensifying, or do you feel comfortable with how you're holding up relative to some of these newer competitive pressures that are coming through?
I think we're holding up actually very nicely. We're very confident in our position. Again, I know nobody likes maybe missing street estimates. At the end of the day, we look at the overall business and the health and look at the long term of the business. We're actually very excited about the future and very confident about it. It is true that, if you look at other big players in this industry, without naming names, I think everybody's going through the same transition. What is happening is there are some other players who are smaller or more aggressive. They're trying to fight through this as well, and that has made it a more competitive environment than we probably anticipated three or four months ago.
We don't see it, I don't think anybody sees that lasting for a long time, which is why, going back to your original question, we're very confident in Q4. We're positioned well to have significant growth.
Thank you. Good luck.
Thank you.
It looks like that's all the time we have for questions today. I'll turn the call back over to Josef for any closing remarks.
Thank you. As I look at our accomplishments in the first six months of the year, including exciting new product launches for both the mobile and desktop platforms and the progress we've made in significantly diversifying our search business, I feel that Perion has never been stronger and is well-positioned for future growth. We generated phenomenal cash flow and significantly increased revenue, EBITDA, and net income. None of this would have been possible without the great team we have at Perion, and I'd like to thank all of them for their continued hard work, dedication, and innovation. Thank you all. Have a great day.
Ladies and gentlemen, this will conclude your conference for today. We do thank you for your participation.