Company: PERI
Filing Date: 2025-03-25
Form Type: 20-F
Source: 0001178913-25-001021
Chunk: 2

Company: Perion Network Ltd.
Filing Date: 2025-03-25
Form: 20-F
Item: Item 3
Chunk 2
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, respectively. In the first quarter of 2024, we experienced a decline in our search advertising activity, attributable to changes in advertising pricing and mechanisms implemented by Microsoft in its search distribution marketplace. These adjustments led to a reduction in Revenue Per Thousand Impressions (RPM) for both Perion and other Microsoft distribution partners. In the second quarter of 2024, we experienced an additional decline in our search advertising activity attributable to Microsoft’s exclusion of a number of publishers from its search distribution marketplace. These changes resulted in a material decrease in our search advertising activity and results of operations. The Microsoft Agreement expired on December 31, 2024, and is now in its tail period. 
 
 In 2024, 23% of our revenue was generated from our agreement with Microsoft, and 10% of our revenue was generated from our agreement with another search provider, mostly in our search business.

If our agreements with our search providers are terminated, expire or are substantially amended on terms not favorable to us, we would experience a material decrease in our business, which could result in a material adverse effect on our business, financial condition and results of operations. In addition, we would be forced to seek additional or alternative search provider services, which may be on less competitive terms or may need to accelerate the business we have with such search providers.
 

The generation of search advertising revenue through publishers is subject to competition. If we cannot compete effectively in this market, our revenue is likely to decline.
 
We obtain a significant portion of our revenue through the configuration of our search service as the default search provider during the download and installation of our publishers’ products and/or use by their services of our search offering and the subsequent searches performed by the users thereof. In 2023 and 2024 the top five publishers distributing our search services accounted for approximately 11% and 15% of our revenue, respectively. There can be no assurance that our current publishers will continue utilizing our revenue-generating monetization services at the levels they did in the past or at all or on terms not less favorable to us. Additionally, traffic from low-quality sources, including websites with irrelevant content or poor user engagement have impacted and may negatively impact the effectiveness of our search advertising. The loss of a substantial portion of our relationships with our publishers, or a substantial reduction in their level of activity, could cause a material decline in our revenue and profitability.
 
To achieve our business goals, we heavily rely on third-party publishers to implement our search offering as a value-added component of their own