Perion slides after slashing 2024 revenue forecast on Microsoft Bing changes

By Jaspreet Singh

(Reuters) -Perion Network's U.S.-listed shares plunged more than 35% on Monday, after the Israeli ad tech firm cut its annual revenue forecast, driven by a drop in search advertising due to changes at Microsoft's Bing.

The company now expects 2024 revenue in the range of $590 million to $610 million, against its prior expectation of $860 million to $880 million.

Changes in ad pricing and other mechanisms by Microsoft Bing in its search distribution led to a decline in search advertising activity, Perion said on Monday.

"The revenue concentration with Microsoft has always been a risk with investing in Perion," said Eric Martinuzzi, an analyst at Lake Street Capital Markets.

"Microsoft advertising unilaterally changed the amount it was willing to pay for indirectly sourced search traffic by all of its search partners..... that's what's causing the reset for Perion."

Microsoft accounted for 35% of its revenue in 2022, according to Perion's annual report. The agreement was renewed in 2020.

Perion estimated first-quarter revenue of $157 million, compared with Wall Street estimates of $175.5 million, according to six analysts polled by LSEG.

The company's stock was down $13.30 in early trading.

They are down about 32% so far this year, pressured by competition from Big Tech firms including Alphabet's Google and Facebook-parent Meta Platforms.

Perion expects to announce its first-quarter results on May 8.

(Reporting by Jaspreet Singh in Bengaluru; Editing by Mrigank Dhaniwala and Sriraj Kalluvila)