A. HISTORY AND DEVELOPMENT OF THE COMPANY Our History We were incorporated in the State of Israel in November 1999 under the name Verticon Ltd., changed our name to IncrediMail Ltd. in November 2000 and in November 2011 changed our name to Perion Network Ltd. We operate under the laws of the State of Israel. Our headquarters are located at 2 Leonardo Da Vinci Street, 24th floor, Tel Aviv 6473309, Israel. Our phone number is 972-73-398-1000. Our website address is www.perion.com. The information on our website does not constitute a part of this annual report. Our agent for service in the United States is our US subsidiary, Intercept Interactive Inc. d/b/a Perion, which is located at One World Trade Center, 71st Floor, Suite J, New York, NY 10007. We completed the initial public offering of our ordinary shares in the United States on February 3, 2006. Since November 20, 2007, our ordinary shares have also traded on the TASE. In recent years, we completed several acquisitions, including the acquisition of Vidazoo Ltd. in October 2021, the acquisition of Hivestack Technologies Inc. in December 2023, and the acquisition of Greenbids SAS in May 2025. Our SEC filings are available to you on the SEC’s website at http://www.sec.gov. This site contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The information on that website is not part of this annual report on Form 20-F and is not incorporated by reference herein. For a description of our principal capital expenditures and divestitures, see Item 5. “Operating and Financial Review and Prospects - Liquidity and Capital Resources.” B. BUSINESS OVERVIEW Perion is an advanced technology leader solving the complexities of modern digital advertising through AI-native execution infrastructure. The global digital advertising market continues to expand rapidly; according to eMarketer, total digital advertising represents an addressable market of $870 billion in 2026, which is expected to grow to $1.13 trillion globally by 2029. To help brands, agencies and retailers maximize the value of their media investments, we focus on making advertising more effective by seamlessly connecting data, creative, and media channels. On February 3, 2025, we introduced Perion One, a unified platform designed to eliminate industry silos and bridge the gap between marketing intent and measurable business results. Through Perion One and our proprietary AI agent, Outmax, we provide a centralized execution infrastructure where AI allocates spend, manages pacing, and optimizes outcomes across the digital ecosystem. This infrastructure enables advertisers to efficiently navigate a fragmented landscape, capturing high-value audiences across Connected TV (CTV), Digital Out of Home (DOOH), Retail Media, social platforms, and the Open Web. Industry Overview The digital advertising industry is undergoing a structural transformation driven by the rapid advancement of AI, changing consumer consumption habits across emerging digital channels, and evolving privacy standards. Advertisers face a complex ecosystem defined by speed and fragmentation, prompting a strategic reassessment of media budgets, thus increasingly demanding outcome-driven, performance-based omnichannel solutions that reduce media waste and maximize Return on Ad Spend (ROAS). According to eMarketer reports, digital advertising spending will account for 77% of total worldwide media advertising in 2026, reaching approximately $870 billion and is expected to increase to approximately $1.13 trillion and 80.9% of total media advertising spend by 2029. Below are some of the key trends and opportunities in the industry: The rise of AI in Digital Advertising AI is fundamentally altering the ad tech landscape. While initial AI applications focused primarily on the planning, workflow, and creative generation layers, the industry is now transitioning toward AI-native execution infrastructure. Modern advertisers are increasingly demanding AI agents capable of operating directly within real-time delivery systems, managing supply paths, optimizing pacing, and allocating budgets under live constraints. This shift from manual orchestration to machine-to-machine, agent-driven execution allows advertisers to process vast datasets instantly, dynamically tailor high-impact creative formats, and achieve superior operating leverage and capital efficiency in their campaigns. 41 The Shift Towards Performance-Driven Solutions Amid macroeconomic uncertainty and the demand for clear Return on Ad Spend (ROAS), the industry is increasingly shifting toward performance-driven advertising. Advertisers are reallocating digital advertising budgets from traditional, top-of-funnel brand awareness campaigns toward direct response and measurable, outcome-driven solutions. This trend demands advanced multi-touch attribution, real-time analytics, and AI-driven optimization to directly link media investments across all channels to tangible business KPIs, such as online conversions, app installs, or offline store visits. The Shift Towards Premium Video and Connected TV (CTV) As viewership continues to migrate from conventional broadcast and cable television to streaming platforms, advertising budgets are accelerating toward Connected TV (CTV). According to eMarketer, CTV ad spending in the U.S. accounted for $33.1 billion in 2025, or 9.5% of total U.S. digital ad spending, and is expected to grow to $52.5 billion in 2029, representing 10.5% of total U.S. digital ad spending for that year, taking a growing share of linear TV ad spending. Historically treated primarily as a top-of-funnel brand awareness channel, CTV is evolving into a full-funnel, performance-driven environment. Marketers increasingly demand measurable outcomes, utilizing advanced targeting, granular audience insights, and multi-touch attribution to link premium video investments directly to engagement, conversions and ROAS. Growth of Commerce and Retail Media Retail Media is one of the fastest-growing segments in digital advertising, leveraging valuable, purchase-based first-party data to drive sales. According to eMarketer, worldwide retail media ad spending accounted for $173.1 billion in 2025, or 21.9% of total digital ad spending, an 18.2% year-over-year increase. In the U.S., Omnichannel Retail Media ad spending accounted for $60.8 billion representing 17.4% of total U.S. digital ad spending in 2025 and is expected to reach $71.7 billion by 2026 and $98.3 billion by 2029, representing 18.4% and 19.6% of total U.S. digital ad spending, respectively. The sector is expanding beyond retailer-owned websites to distribute personalized offers across off-site digital channels, including CTV, Social and DOOH. By bridging media exposure with actual sales data, Retail Media provides closed-loop measurement that enables brands to deliver localized campaigns and drive immediate purchasing decisions. Multichannel Advertising and Cross-Platform Engagement The modern consumer journey is more fragmented than ever, spanning multiple devices, platforms, and formats. Consumers today interact with brands across multiple platforms such as social media, search engines, websites, streaming services, and more, before making a purchasing decision. To maximize reach and engagement, advertisers are shifting toward multichannel advertising strategies, ensuring a seamless and consistent brand experience across all digital touchpoints. Digital Out-of-Home (DOOH) Digital out-of-home (DOOH) refers to digital media used for advertising outside of the consumer's home in the public domain. Unlike traditional out-of-home advertising, such as billboards with printed posters, DOOH utilizes advanced digital technology to deliver engaging, contextually relevant content in public spaces. The DOOH advertising channel is undergoing a rapid transition toward programmatic DOOH (pDOOH), which automates the buying, placement, and real-time optimization of outdoor inventory. Driven by dynamic data inputs and its growing integration with Retail Media, DOOH offers highly targeted reach and enhanced, measurable ROI for out-of-home audiences. According to Statista, worldwide DOOH ad spending is expected to increase from $17.2 billion in 2024 to $26.3 billion in 2030, reflecting a 53.0% growth. In the U.S., eMarketer expects DOOH to grow from $3.9 billion in 2025 to $5.3 billion in 2029. The Decline in Open Web While display advertising across the Open Web has historically been a foundational channel, it is currently experiencing structural headwinds and a gradual decline in traffic. This contraction is driven primarily by two factors: the rapid proliferation of generative AI and search conversational interfaces—which increasingly provide users with direct answers and reduce outbound click-through rates to independent publisher sites—and a broader consumer attention shift toward closed media ecosystems. As audiences migrate to these “walled gardens,” advertising spend follows, causing the Open Web to lose relative market share. Consequently, success for publishers and advertisers in the remaining Open Web environment increasingly relies on AI-driven supply path optimization and high-impact dynamic creative formats to maximize user engagement and extract maximum value from every available impression. The Rise in Social Media and Video-first Platforms Advertising Conversely, social media and video-first platforms such as Meta, YouTube, TikTok, LinkedIn, Reddit and Pinterest - are experiencing a continuous rise in usage and consumer engagement. Driven by shifts in consumer behavior, algorithmic feeds, immersive video, and integrated commerce capabilities, these closed ecosystems are capturing an increasing share of digital advertising budgets, actively taking market share away from the Open Web. However, executing campaigns across these fragmented “walled gardens” presents significant complexity. Because each platform operates its own opaque delivery environment, advertisers increasingly require sophisticated, cross-channel technology to avoid isolated, inefficient buying. Companies that have access to both those social “walled gardens” and the Open Web have an important competitive advantage; Advertisers are expected to increasingly rely on AI-native execution infrastructure and proprietary agents, such as Perion’s Outmax, to deploy custom bidding algorithms tailored to specific KPIs. This technology enables brands to navigate platform-specific constraints, dynamically allocate real spend, and secure highly efficient, performance-driven outcomes within these closed ecosystems. 42 Digital Audio As consumer engagement with podcasts and music streaming platforms rises, digital audio advertising continues to experience steady growth. According to eMarketer, digital audio ad spending accounted for $7.6 billion in 2025, and is projected to climb to $9.4 billion by 2029. Advances in Generative AI have fundamentally enhanced this channel, enabling advertisers to dynamically generate personalized audio ads at scale, adapting messages in real time based on listener context, demographics, and behavior. Additionally, in store or in malls audio messages are ripe for programmatic integration replacing the old fashion manual announcements. To capture this expanding addressable market, Perion offers WAVE, a cutting-edge generative AI solution designed to dynamically produce tailored audio advertisements that adapt messaging in real time based on a listener’s context, behavior, geography, and demographics. Search Advertising Search advertising is a direct-response channel for capturing high-intent consumer behavior. According to eMarketer, U.S. search advertising spend accounted for $145.0 billion in 2025, representing 41.4% of total U.S. digital media ad spending, and is expected to grow to $200.0 billion in 2029 or 39.9% of total digital media ad spend. However, the growth rate is expected to decline. The search landscape is experiencing a dynamic transformation due to the rapid integration of generative AI, conversational interfaces, and alternative discovery tools. These advancements are redefining traditional search behaviors, creating new competitive pressures, and modifying publisher monetization dynamics. Continued Focus on user privacy While Google reversed its decision to phase out third-party cookies in Chrome in July 2024, the digital advertising industry remains committed to a privacy-first ecosystem. Regulatory bodies in the U.S. and Europe continue to enforce strict data protection laws, compelling AdTech platforms to reduce reliance on legacy tracking methods. The industry continues to invest in alternative identity solutions, first-party data strategies, clean rooms, and AI-driven contextual targeting or statistically based optimization to ensure robust campaign performance while safeguarding consumer privacy. Regulators in the U.S., EU, U.K. and other countries remain firm on enforcing stricter data privacy laws and consumer protections, and enforcement bodies continue to scrutinize industry practices, to ensure that consumer privacy is safeguarded, setting compliance requirements that push advertisers to adopt privacy-centric approach. Our Strengths Perion One On February 3, 2025, we introduced our Perion One strategy, designed to unify our diverse advertising channels, brands, and technologies into a single, advanced AI-native execution infrastructure. Perion One is intended to eliminate industry silos, enhance operational efficiency, and provide advertisers with a seamless way to execute and optimize cross-channel campaigns. Unlike traditional application-layer software, Perion One serves as an execution platform where AI directly controls real-time delivery systems, manages supply paths, and executes outcomes. This unified platform empowers brands, retailers, and agencies to increase audience reach, improve engagement, and drive measurable performance across the entire digital landscape. Performance & Accountability: Outcome-Driven Solutions As marketers increasingly demand solutions that link media investments to tangible business KPIs such as Return on Ad Spend (ROAS), we focus heavily on delivering outcome-driven solutions. Our proprietary technologies, such as our Performance CTV Solution, are designed to bridge the gap between brand awareness and performance marketing, turning traditionally top-of-funnel channels into full-funnel, ROI-focused environments. By combining advanced targeting, personalized creative formats, multi-touch attribution, and real-time insights, our solutions allow advertisers to optimize every dollar spent by reaching the right customers at the right moment with precision, relevance, and measurable impact. Customer-Centric: Built Around the Brand, Not the Channel We believe advertisers increasingly seek integrated solutions that optimize performance across platforms rather than within isolated channels. Our technology is designed to provide a customer-centric, channel-agnostic approach that supports end-to-end campaign management for brands, agencies, and retailers. Our AI-native execution agent, Outmax, operates independently and remains truly agnostic, allocating real spend and optimizing outcomes across multiple environments—including Connected TV (CTV), Digital Out of Home (DOOH), social, commerce, and the Open Web. Because our infrastructure is not constrained by the incentives of a single ecosystem, we can reallocate budgets seamlessly based on performance signals rather than platform bias, allowing us to optimize outcomes for our clients. 43 AI at the Core: Intelligent Execution Infrastructure AI is embedded at the core of Perion One. We have transformed from merely utilizing AI in planning workflows to deploying an AI-native execution infrastructure. At the center of this is Outmax, our proprietary AI agents that operate directly at the execution layer. Outmax allocates real spend, manages pacing, and optimizes outcomes in real time under live delivery constraints. Furthermore, through our acquisition of Greenbids (the technology behind Outmax for walled gardens), the leveraging of Outmax for CTV that was built in-house organically, and the launch of SODA (Supply Optimization & Demand Amplification), our AI algorithms create custom, brand-specific bidding optimizations across major Demand Side Platforms (DSPs) and walled gardens, enabling us to significantly increase supply yield, increasing ROI, and reducing carbon emissions through highly efficient supply path optimization. Market Agility and Cross-Channel Adaptability In a landscape defined by macroeconomic volatility, rapidly shifting consumer behaviors, and economic uncertainty, agility is crucial. Advertisers frequently shift their preferences from brand awareness to direct response and performance-driven formats to maximize engagement and ROAS. Our multichannel footprint enables us to quickly adapt to these shifts, maintaining a strong presence across CTV, DOOH, retail media, the Open Web, and walled gardens such as YouTube, Meta, TikTok and Google DV360. This agility allows Perion to swiftly reallocate resources and capture spending in areas of increased advertiser demand, ensuring that we continue to provide value and adapt to our clients' needs regardless of broader market fluctuations. AI-Driven Operational Efficiency and Scalability We continuously focus on driving internal and external operational efficiencies. The transition to the Perion One platform was designed to drive cross-company efficiency by unifying our brands, operations, and global departments to streamline our organizational structure. Furthermore, the integration of our AI agents, Outmax, brings significant operating leverage by automating the most labor-intensive aspects of campaign execution, such as real-time pacing, spend allocation, and cross-channel tuning. By reducing manual tasks, our AI-driven automation processes enable us to manage higher ad spend and campaign complexity with leaner teams, driving higher productivity and lower server costs, and a structurally more efficient execution model that supports sustainable profitability. Strong Balance Sheet and Robust Cash Generation Perion prides itself in its decade-long generation of positive cash flow from operations. Throughout the years, the Company built a strong cash position, focusing on profitable growth, and has accumulated cash and cash equivalents, short-term bank deposits and marketable securities that stands at over $312.9 million as of December 31, 2025, with no debt. The Company’s capital allocation strategy strikes a balance between organic growth, strategic inorganic growth through targeted acquisitions and a share repurchase program of up to $200 million, of which $118 million were already executed through December 31, 2025. Business Strategy Overview Our strategy is centered on operating and scaling an AI-native execution infrastructure that drives measurable outcomes across major digital advertising channels and market verticals. In 2025, we unified our technologies, brands and operating structure under Perion One, transitioning from a portfolio of solutions toward an integrated execution platform. Perion One is designed to operate at the execution layer of digital advertising, where media spend is allocated, pacing is managed, supply paths are optimized and performance is measured under real-time constraints. At the core of this infrastructure is Outmax, our proprietary AI execution agents, embedded directly into live campaign environments. We believe that as AI increasingly automates planning, analytics and workflow layers across the industry, value may increasingly concentrate in execution infrastructure, where real-time decisioning, financial accountability and supply access reside. Our strategy is built on three pillars. 1. Build and Scale Execution Infrastructure Across High-Growth Channels We focus on embedding AI directly into live media delivery systems rather than operating solely at the planning or workflow layer. Our execution infrastructure is designed to unify fragmented media environments across Connected TV (CTV), Digital Out-of-Home (DOOH), Retail Media and Commerce, social platforms, walled gardens and the open web. Rather than requiring customers to change their existing buying models, we integrate with major platforms while providing centralized execution logic and accountability. 44 Our growth strategy prioritizes channels where measurable performance is increasingly required, linear budgets are migrating to digital and programmatic adoption is accelerating. These include CTV, DOOH Social, Video Platforms, and Web. We continue to expand our capabilities across these environments while maintaining a channel-agnostic architecture. We believe this execution-layer positioning differentiates us from application-layer software providers whose primary function is reporting, orchestration or workflow management. 2. Invest in AI Innovation Across Demand and Supply AI is a central component of our long-term strategy and a core area of ongoing investment. We invest in AI technologies that enhance campaign execution, optimization, targeting, creative adaptation and measurement across channels. Our AI capabilities operate directly within live media environments, enabling real-time allocation of spend, pacing control and performance optimization under defined constraints. Our strategy spans both demand-side execution and supply-side monetization. We apply transaction-level intelligence to optimize supply paths, improve yield, reduce latency and enhance transparency into partner economics. We believe aligning demand and supply through intelligent infrastructure enhances ecosystem efficiency while supporting sustainable monetization models for publishers. In parallel, we apply AI and automation across our internal infrastructure and operational processes to streamline workflows, strengthen pricing discipline, improve data analysis and increase scalability without proportional increases in operational resources. We believe continued investment in AI-driven infrastructure supports our ability to manage increasing campaign complexity and adapt to evolving privacy and platform dynamics. 3. Expand Our Ecosystem Through Global Presence, Partnerships and Disciplined Inorganic Growth We operate globally, with headquarters in Israel, primary sales offices in the United States and additional presence across North America, EMEA, APAC and other regions. Our strategy includes expanding our geographic footprint in markets where digital media consumption, programmatic adoption and retail media ecosystems are developing. Geographic diversification broadens our addressable opportunity and strengthens relationships with multinational advertisers and publishers. A core component of our expansion strategy is forming strategic partnerships that enhance access to demand, supply and data. These include integrations with major buying platforms, retail media networks, audience data companies, commerce and payment data providers and media owners. Our objective is to remain platform-neutral while embedding our execution infrastructure wherever media is bought and sold. In addition to organic innovation, we selectively pursue acquisitions and strategic investments that accelerate our execution infrastructure strategy. We evaluate potential transactions based on strategic fit, technology differentiation, integration feasibility, financial profile and cultural alignment. We believe disciplined inorganic growth enables us to expand capabilities and enter new markets while maintaining operational focus. Strategic Positioning The digital advertising industry is transitioning from fragmented, interface-driven software toward infrastructure that enables real-time execution. Our objective is to position Perion as: • A neutral, cross-channel execution layer • A production-grade AI agent operator • A scalable infrastructure platform serving both advertisers and publishers While AI continues to reshape the broader technology landscape, we believe execution infrastructure where real dollars are allocated and outcomes are delivered, remains structurally durable. Our strategy is to continue investing in this layer, scaling Perion One adoption and enhancing operational discipline over time. 45 Our Solutions In an increasingly fragmented digital ecosystem, Perion provides advertisers, agencies, and publishers with a comprehensive suite of advanced technology solutions. Designed to drive measurable outcomes and operational efficiency, our solutions bridge the gap between media exposure and business results across all major digital channels. AI Infrastructure for Demand & Supply Solutions The foundation of our offerings is the Perion One platform, an AI-native execution infrastructure designed to unify our diverse advertising channels, technologies, and data sets. Unlike application-layer software that merely visualizes data or routes workflows, Perion One operates directly at the execution layer of media delivery. It provides a centralized ecosystem where marketers define their objectives, budgets, and guardrails, while our underlying AI algorithms orchestrate real-time bidding, pacing, and supply path optimization. All of the solutions detailed below—spanning across Connected TV (CTV), Digital Out of Home (DOOH), social, and the open web - operate natively on top of or seamlessly complement this unified infrastructure, driving consistent performance and structural efficiency across the entire advertising lifecycle. A. Outmax AI Agent Outmax is Perion’s proprietary, production-grade AI execution agent embedded directly within the Perion One infrastructure and operates across several major social platforms, Open Web, major DSPs, and CTV channels. Operating under real-world delivery constraints, Outmax shifts the burden of manual campaign optimization to machine learning. The agent allocates real advertising spend, manages real-time pacing, and continuously optimizes outcomes across multiple channels. By systematically identifying and executing upon high-performing audiences and inventory subsets without ecosystem bias, Outmax drives high Return on Ad Spend (ROAS) while delivering significant operating leverage for our clients. B. CTV Perion’s Connected TV solutions enable brands to reach highly engaged audiences across premium streaming channels, such as Hulu, HBO Max, Disney+, and DirecTV. In 2025, our CTV revenue increased by 42% year-over-year, also driven by the launch of our Performance CTV Solution. This solution integrates Perion’s AI-powered creative optimization and multi-touch attribution technology with premium inventory, effectively bridging the gap between top-of-funnel brand awareness and lower-funnel performance marketing. By turning CTV into a full-funnel, ROI-focused environment, Outmax for Performance CTV allows marketers to link their television media investments directly to tangible business key performance indicators (KPIs) like conversions and measurable ROAS. Complementing our performance capabilities is our High-Impact CTV Solution Suite, which provides a wide array of immersive, high-end formats designed to captivate viewers during prime moments, such as gripping live sports events or show intermissions. These premium formats include Branded CTV and Dynamic CTV, which personalize content in real time designed to maximize relevance. Furthermore, our Stay-Live CTV provides a picture-in-picture experience to keep viewers connected during live events, while our Live CTV with the L Bar format maintains brand visibility via a non-intrusive banner during live broadcasts. We also offer interactive overlays and Pause Ads, which allow brands to occupy the screen during user-initiated reflective break moments. Together, these innovations ensure that advertisers can sustain visibility and drive deeper engagement without relying solely on conventional video assets. C. DOOH Our programmatic Digital Out of Home (pDOOH) platform offers media buyers and owners a comprehensive, full-stack technology solution to manage, deliver, and optimize advertising across physical public spaces. In late 2025, we further advanced this channel with the launch of the Perion DOOH Player. Integrated directly into our Ad Server, Header Bidder, and Supply-Side Platform (SSP), the DOOH Player acts as an end-to-end operating system that unifies ad delivery and yield optimization, replacing fragmented legacy workflows. This hardware-agnostic solution allows media owners and digital signage partners to optimize both direct and programmatic revenue while scaling recurring revenue opportunities across the DOOH and Retail Media ecosystems. Perion’s DOOH business continued to gain traction, growing by 36% year-over-year in 2025, representing 22% of our total display advertising revenue. According to Statista, worldwide DOOH ad spending is expected to increase from $17.2 billion in 2024 to $26.3 billion in 2030, reflecting a 53.0% growth while in the U.S., eMarketer expects DOOH to grow from $3.9 billion in 2025 to $5.3 billion in 2029. D. Retail Media & Commerce Retail Media remains a highly strategic growth engine for Perion, achieving a 36% year-over-year revenue increase in 2025 to over $109.9 million. Our omnichannel solutions allow advertisers to leverage purchase-based, first-party data to deliver dynamic, personalized, and localized offers across off-site screens, including CTV and DOOH. In 2025, we significantly expanded our commerce capabilities through strategic integrations and partnerships with Albertsons Media Collective, Walmart Connect, and Mastercard. These integrations allow advertisers to activate aggregated, real-world purchase insights, engage high-intent shoppers across multiple touchpoints, and utilize closed-loop measurement to connect media exposure directly to offline and online sales. 46 E. High-Impact Display Our High-Impact Display suite transforms standard open-web display advertising into immersive, attention-driven experiences. In 2025, U.S. display advertising spend, including banners, rich media, video and social, was $198.1 billion and, according to eMarketer, is expected to increase by 49% and reach $294.3 billion in 2029. eMarketer also reports that rich media, including high-impact ad formats, as well as outstream and instream video accounted for $143.7 billion of U.S. digital display ad spend in 2025 and is expected to increase by 60.5%, reaching approximately $230.6 billion in 2029. Utilizing AI-driven Dynamic Creative Optimization (DCO), our platform renders and customizes visually striking ad formats across desktop and mobile devices based on real-time data points. This suite also incorporates innovative features such as our in-ad AI Chatbot, which enables consumers to interact dynamically with advertisers in real time, driving deeper user engagement and stronger brand connection. F. Digital Audio The U.S. Digital Audio Advertising Market is on a significant upward trajectory, with projections indicating that advertising budgets will approach $9.4 billion by 2029. This rapidly growing sector represents a substantial opportunity for innovative advertising solutions. To capture the expanding digital audio advertising market, Perion offers WAVE, a cutting-edge generative AI solution. WAVE dynamically produces tailored, personalized audio advertisements at scale, adapting messages in real time based on a listener’s context, behavior, geography, and demographics. G. Social Executing optimized campaigns across fragmented, closed “walled gardens” such as Meta, YouTube and TikTok, requires specialized technology to overcome platform-specific constraints. Perion One, through Outmax, provides advanced AI algorithms that create custom, brand-specific bidding optimizations across an increasing range of major social ecosystems. This technology reduces media waste, aligns every campaign with specific business KPIs, and allows advertisers to extract highly efficient, performance-driven results from walled garden investments. H. Audience Segmentation SORT® is our proprietary, AI-driven audience segmentation technology that provides scalable, privacy by design targeting without the use of third-party cookies or personally identifiable information. By analyzing real-time, cookieless data signals to identify shared traits and behaviors, SORT® classifies users into anonymous Smart Groups, enabling advertisers to maintain robust campaign performance while adhering to evolving global privacy standards. I. Website Publisher’s Solution Perion equips digital publishers with advanced monetization technology, including ad serving and display monetization. In 2025, we enhanced our publisher offering with the launch of SODA (Supply Optimization & Demand Amplification). SODA is a next-generation AI algorithm designed for intelligent Supply Path Optimization (SPO) and traffic shaping. By evaluating incoming bid requests through a smart mediation layer, SODA identifies and selects only the most efficient, top-performing paths, significantly optimizing yield for publishers while optimizing site performance and latency. J. Search Advertising Search advertising historically provided a reliable method for capturing high-intent consumer behavior. Throughout 2025, our Search advertising business operated under the tail period of our legacy agreement with Microsoft Bing, which expired on December 31, 2024. Starting in 2026, our Search operations transitions to operate primarily with Yahoo. According to eMarketer reports, advertisers will increase their investment in search through 2029. The U.S. search advertising market is expected to reach $200.0 billion in 2029, representing 39.9% of U.S. digital ad spending. Due to structural market changes and strategic platform shifts, Search advertising is becoming a much less significant part of our overall operations and going forward is expected to represent a significantly smaller portion of our total revenue and Contribution ex-TAC; however, the segment remains profitable and continues to generate positive cash flow for the Company. 47 Our Technology 2025 was a pivotal year for Perion’s technology. Several significant investments were brought together: ● Perion’s decades of building and operating a portfolio of advanced adtech technologies ● The acquisition of the Greenbids AI media optimization technology ● Significant investment in a foundational AI infrastructure that powers our agentic initiatives ● Significant investment in ad tech engine efficiency ● Significant investment in unifying all of the above under the Perion One platform The amalgamation of the above existing and new technologies is designed to create a stronger moat that powers the delivery and innovation of our products and solutions described above. Our Outmax AI-native execution infrastructure empowers: ● Intelligent buy-side planning, activation, optimization and reporting, across multiple channels and all stages of the consumer journey ● Intelligent publisher-side inventory optimization and monetization The technology backbone behind our solutions is designed to connect brands with consumers via meaningful digital interactions and experiences. This is done through these key components: a. Perion One, Insights, & Perion ID Introduced on February 3, 2025, Perion One serves as both an advanced technology framework and a strategic consolidation of our existing capabilities. By integrating and reimagining multiple technologies, Perion One is designed to provide a seamless, streamlined experience for both supply- and demand-side customers, making it easier to access, explore, and optimize our products and services. As we continue to develop and scale the platform, Perion One is being designed to provide advanced analytical capabilities and performance metrics. We are building infrastructure intended to aggregate critical data—including total budget, reach, impressions, and engagement metrics—aiming to give clients full visibility into Key Performance Indicators (KPIs) through self-serve operational interfaces and pre-built dashboards. To support unification across the platform, we also developed Perion ID, our proprietary identity solution for unified client and user access. Perion ID is built on modern security standards, featuring a flexible authentication framework for individual users and federated enterprise system integrations to support the fluid adoption of our multiple offerings. b. Outmax AI Agent Outmax is Perion’s proprietary, production-grade AI execution agent embedded directly within the Perion One infrastructure. It brings deep intelligence to the various phases of campaigns: planning, activation, optimization and reporting, utilizing models built on top of our data as well as that supplied by our customers. Based on campaign-to-campaign learnings and complex problem solving methodologies, these technologies are leveraged to build products that generate better performance for our customers and improved efficiency by providing rules-based as well as budget and pacing optimizations. A strong feature of Outmax is its ability to optimize a customer’s campaign, in real time, towards a specific desired performance outcome. The technology is embedded in Perion’s campaign execution engines, and the Outmax AI Agent is also able to dynamically optimize campaigns running within walled gardens, and emerging digital touchpoints. 48 c. Buying Technologies The set of buying technologies is designed to assist advertisers with campaign planning, design, activation, and optimization by providing data-driven recommendations and automations aligned with their specific objectives. It suggests advertising channels, audience targeting strategies, and ad product mixes based on benchmarks and past campaign data. Outmax AI Agent is able to assist or own the above workflow components and features. Especially during the execution and optimization phases, it is able to manage a proprietary mix of sub-agents and optimizes based on campaign, channel and client objective, using: ● Its own set of advanced machine-learning optimization models for continuous campaign optimization towards specific performance goals. ● SORT®, our proprietary cookieless targeting technology, which was developed in response to advertisers’ growing recognition of user privacy matters and the planned deprecation of cookies by Google. SORT® displays the result of our ability to analyze the complex data signals that are derived from our assets that flow through our technology. ● Campaign targeting, pacing, and audience configurations d. Creative Platform Perion’s DCO - high-impact Dynamic Creative Optimization Platform is a key component of our solutions. Our proprietary creative technology platform enables the automation of High Impact ad unit production across all formats (Display, Video, CTV and DOOH). Our consolidated technology workflow touches every aspect of campaign flow, including ad building, tag creation, creative optimizations & post-campaign performance. We learn, adjust, and continually iterate - allowing us to create engaging, high-performing user experiences that perform across all stages of the funnel. Available for use in fully managed campaigns or in programmatic channels, our platform delivers superior results for advertisers and agencies looking to take their creativity to the next level. In conjunction with our creative platform, Outmax AI leverages Machine Learning for campaign delivery and optimization, using real-time analysis to determine the most effective advertisements for specific target audiences, leading to improved campaign performance. Our AI-based creative platform has the ability to create hundreds and thousands of different ad permutations, targeted at different audiences and optimized across devices and browsers, based on real-time signals such as weather and user intent groups. e. Supply Technology & SODA The Supply Management set of technologies designed to facilitate relationships with our publishers by treating impressions in an optimal manner. Our platform is driven by business requirements and agreed upon monetary expectations, which in turn determine which ads are allowed, what prices are expected, and the allowable frequency. SODA (Supply Optimization & Demand Amplification) is our intelligent AI solution that helps publishers improve the monetization of their inventory. The efficiency gains result in a leaner technology footprint and lower costs without sacrificing performance, as well as benefits partners on both sides of transactions via SPO/DPO (Supply Path Optimization / Demand Path Optimization). Our proprietary Online Video Player (OVP), which integrates a full, comprehensive suite of services, including an ad server, allows publishers and brands to upload, manage and stream video content to targeted audiences. Perion’s OVP is certified with the major advertising platforms and compatible with all devices and video formats. The OVP is integrated with a proprietary ad server, ensuring a consistent user experience by reducing latency and errors, adding to its inherent power and efficiency. f. Search Advertising Technology The technology behind our search solution is composed of the following systems: ● Publisher management system that provides publishers access to an online dashboard providing analytics and performance optimization tools, as well as reports designed to enable them to maximize their distribution and monetization. ● Search demand management system that integrates and onboards demand vendors to our monetization products. The integration supports multiple vendors according to predefined configurations and rules, enabling various business models and offerings, and making it possible for Perion’s R&D team to innovate on the “search stack.” ● Monetization products designed to deliver algorithmic search results concurrently with sponsored listings, both served for the same search queries. They can be operationalized in different ways, including the transmission of search queries to search engines, search Feed APIs operated on publishers’ domains and an enriched and optimized hosted search results page which offers an enhanced user experience. 49 g. Agentic Development Behind all of the advanced technologies we build and operate is a talented engineering team. Aside from building and operating AI systems for our platform and our customers, we are also heavy users of AI for all internal software development. We are firm believers in the power of AI, and are investing in internal AI adoption that remains at the service of enterprise requirements. Competitive Landscape The advertising technology industry is highly competitive and rapidly evolving. Numerous digital media and advertising technology companies offer services comparable to our advertising solutions and compete for finite advertiser and agency budgets as well as limited publisher inventory. In addition, a number of niche providers compete with us by delivering specific components or subsets of the services we offer. Our competitors on both the supply and demand sides include privately held companies such as Kargo and GumGum, as well as publicly traded companies such as The Trade Desk, Zeta, Criteo, PubMatic, Nexxen, Magnite, and Teads, among others. We also compete with large, well-capitalized technology companies, including Google, Meta, Amazon, and Microsoft, which possess substantially greater financial, technological, and other resources than we do. Certain companies in the ecosystem operate simultaneously as partners and competitors. For example, Google and The Trade Desk compete with various aspects of our offerings and partner with us in certain areas. Our Outmax solution is integrated with many leading platforms to enable clients to optimize performance outcomes, while at the same time we compete with certain platform-based and independent solutions. Similarly, although we compete to some extent with major demand-side platforms (DSPs), our technology is integrated with leading DSPs to facilitate activation of Perion’s advanced solutions and high-impact campaigns. In our search business, search engines independently generate organic traffic outside of our publisher network while also contributing to our search monetization activities. We also face competition from specialized point solutions in discrete segments of our business. For example, in digital out-of-home (DOOH), we compete with T-Mobile’s Vistar platform and other DOOH-focused providers. In YouTube optimization, we compete with companies such as Channel Factory and other targeted optimization providers. Within our search business, beyond traditional search engines, we face competition from alternative discovery platforms that enable users to access content outside conventional search environments. These include companies such as IAC and System1, as well as emerging platforms leveraging AI-driven discovery tools, browser integrations, contextual search models, and other alternative access points. As we introduce new solutions and expand our capabilities, and as our competitors do the same, we expect competitive pressures to intensify. Many of our current and potential competitors have significantly greater financial, research and development, data analytics, infrastructure, manufacturing, and sales and marketing resources than we do. These competitors may use their superior resources to acquire complementary businesses, enhance brand recognition, expand market share, accelerate innovation, and develop new technologies, systems, products, or features that compete directly or indirectly with our solutions and search services. As a result, demand for our solutions, products, and services could be adversely affected, regardless of whether competing offerings are equivalent or superior. With respect to our supply-side technologies, through which we provide monetization and yield optimization solutions to publishers, we compete with a range of private companies, including Assertive Yield and Aditude, as well as other specialized providers. In addition, we compete with large supply-side platforms (SSPs) that, while often serving as integration partners within the broader ecosystem, also offer competing monetization, optimization, and infrastructure solutions. These dual relationships create a dynamic in which certain market participants act simultaneously as collaborators and direct competitors. In addition, the introduction and rapid adoption of generative AI platforms, including ChatGPT, Perplexity, Copilot by Microsoft, Gemini by Google, Claude by Anthropic, and Grok by X, may lead to the development of new advertising, content discovery, and media activation tools that increase competition within the advertising technology industry. These technologies may lower barriers to entry, alter user behavior, shift traffic patterns, and disrupt traditional monetization models, which could intensify competitive dynamics across our markets. 50 Intellectual Property Our proprietary technology, including our platform, products and related algorithms, are critical to our operations and competitive advantage. We strive to protect our intellectual property rights by relying on confidentiality and invention assignment agreements, trade secret, trademark, copyright, and patent laws in the United States and other countries as well as technical measures to establish and protect our intellectual property. Our portfolio includes registered trademarks and domain names in various countries as well as approximately 8 patents registered mainly in the U.S. Some components of our software products were developed solely by us. We license certain components of our software from third parties. We believe that the components we license are not material to the overall performance of our software and may be replaced without significant difficulty. We enter into licensing arrangements with third parties for the use of software components, graphic, sound and multimedia content integrated into our products. Our employees and consultants are required to execute confidentiality covenants in connection with their employment and consulting relationships with us. These agreements generally contain assignment and waiver provisions relating to the employee’s or consultant’s rights in respect of inventions. Intellectual property laws, together with our efforts to protect our proprietary rights, provide only limited protection, and any of our intellectual property rights may be challenged, invalidated, circumvented, infringed or misappropriated. For more information, see the Risk Factor titled – “Our proprietary information, technology and other intellectual property may not be adequately protected and thus our intellectual property may be unlawfully copied by or disclosed to other third parties.” Government Regulation Our business is conducted through the internet and therefore, among other things, we are subject to the laws and regulations that apply to e-commerce and online businesses around the world. These laws and regulations have been enacted and still evolving in the United States, Europe, Israel, Canada, and elsewhere and may impede the growth of the internet and AdTech or otherwise adversely impact our services. These laws and regulations cover data protection, data privacy, cybersecurity, e-commerce, content, use of “cookies”, pricing, advertising, distribution of “spam”, copyright and other intellectual property, use of AI systems and related technologies, libel, marketing, distribution of products, protection of minors, consumer protection, accessibility, taxation, online payment services and more. Many areas of laws and regulations affecting the internet and AdTech remain largely unsettled, even in areas where there has been some legislative or regulatory action. In many cases, when we deliver an advertisement we are able to collect certain data, including personal data, about the content and placement of the ad, the relevancy of the ad to a user and the interaction of the user with the ad, such as whether the user viewed or clicked on the ad or watched a video. As we collect and aggregate data provided by billions of ad impressions and third-party providers, we analyze the data in order to measure and optimize the placement and delivery of our advertising inventory and provide cross-channel advertising capabilities. Our ability to collect, use, maintain and otherwise process such data is crucial. We are subject to the data privacy laws and regulations of various jurisdictions, including the GDPR, U.S. state privacy laws such as the CCPA, the Israeli Privacy Law, the Canadian Privacy Law and the ePD. These laws and regulations generally impose stringent requirements such as transparency and user consent requirements and allow data subjects to request that we discontinue using certain data. In addition, some countries are considering or already enacted legislation requiring local storage and processing of data. Certain U.S. federal laws restrict online service providers’ collection of user information on minors and certain states in the U.S. have adopted “data brokers” laws and regulations imposing a centralized deletion mechanism, such as California’s Delete Request and Opt-out Platform (DROP) that will enable consumers to submit a single request triggering deletion obligations across all registered data brokers. This could affect data made available to us by our data brokers. Such laws and regulations further impose certain requirements on data brokers, including, without limitation, requirements relating to registration, consent, disclosure, and/or cybersecurity as well as restrictions on the collection or transfer of certain data sets considered to be sensitive such as precise geolocation data. Non-compliance with such laws could result in enforcement actions, significant fines and reputational harm. We voluntarily participate in industry self-regulatory bodies such as the IAB TCF, IAB GPP, NAI, IAB, DAA and the DAAC, which promulgate best practices or codes of conduct addressing, among other things, data protection, data privacy, cybersecurity and the delivery of digital advertising. In light of court rulings relating to the TCF, there may be some ambiguity around the lawfulness of informed consent obtained via the TCF in the EEA and UK. We adopted privacy policies and practices to address privacy implications on our various business activities. As part of our compliance program, we regularly review our privacy policies and practices in light of evolving regulation. 51 An increasing number of U.S. states, such as California, Virginia, Connecticut, Colorado, Texas, New York and Washington, adopted and additional states are planning to adopt, statutes concerning data protection and/or AI regulations which could affect us. This has led to an increasingly varied and complex regulatory landscape and could result in materially increased costs. The interpretation of data protection, data privacy and cybersecurity laws and regulations, and their application to our business may, in certain cases, be interpreted and applied in conflicting and more restrictive ways and in a manner that is not consistent with our current data protection, data privacy and cybersecurity practices. The enactment of new proposed laws, and the interpretation of existing laws, adds complexity to our operations, and could result in material costs, and may restrict the growth and profitability of our business. For more information, see the Risk Factor titled – “Our business depends on our ability to collect, use, maintain and otherwise process data, including personal data, to help our clients deliver advertisements and to disclose data relating to the performance of advertisements. Any limitation imposed on our collection, use, maintenance or other processing of this data could significantly diminish the value of our solution and cause us to lose sellers, buyers, and revenue. Regulations, legislation or self-regulation relating to data protection, data privacy, cybersecurity, AI, e-commerce and internet advertising and uncertainties regarding the application or interpretation of existing or newly adopted laws and regulations threaten our ability to collect, use, maintain and otherwise process this data, could harm our business and subject us to significant costs and legal liability for non-compliance.” Recent Acquisitions Acquisition of Hivestack On December 11, 2023, Perion announced it has completed the acquisition of Hivestack Technologies Inc., a global innovative full-stack programmatic DOOH company. The terms of the transaction included US $100 million in cash paid at closing and a 3-year employee retention and performance-based payment plan of up to US $25 million. DOOH advertising transforms ordinary public spaces into dynamic experiences, engaging audiences with eye-catching, personalized content in real-time. It harnesses cutting-edge technologies to target, deliver and measure immersive ads that connect brands with people on the go. Acquisition of Greenbids On May 13, 2025, Perion announced it has completed the acquisition of Greenbids SAS, an innovative AI platform that creates custom algorithms for campaign-level optimization across walled garden platforms such as YouTube, Facebook and Instagram, as well as other leading DSPs such as Google DV360 and The Trade Desk. The terms of the transaction included US $27.5 million in cash paid at closing, a three-year employee retention of US $15 million in cash and equity, and two-year performance-based payment of up to US $22.5 million. C. ORGANIZATIONAL STRUCTURE The legal name of our Company is Perion Network Ltd. and we are organized under the laws of the State of Israel. The following table sets forth our significant subsidiaries, all of which are 100% owned directly or indirectly by Perion Network Ltd.: Name of Subsidiary Place of Incorporation Codefuel Ltd. Israel IncrediMail, Inc. Delaware Intercept Interactive, Inc. New York Vidazoo Ltd. Israel Hivestack Technologies Inc. Canada Perion SAS France 52 D. PROPERTY, PLANTS AND EQUIPMENT Our headquarters are located in Tel Aviv, Israel. As of December 31, 2025, we lease approximately 32,328 square feet, excluding office space which we currently sublease. The lease expires in April 2029, with an option to extend for two additional three-year and two-year periods, unless we issue a 270-day prior written notice to the contrary at our sole discretion. Annual net cost is approximately $1.2 million. Our principal offices in the United States are located at the World Trade Center (WTC) in New York. As of December 31, 2025, we lease approximately 9,500 square feet, excluding office space which we currently sublease. The lease expires in June 2026 and the annual net cost is approximately $0.7 million. Our principal offices in Canada are located in Montreal, Canada. As of December 31, 2025, we lease approximately 4,000 square feet. The lease expires in September 2026 with an option to extend for one additional two-year period. Annual net cost is approximately $0.1 million. This excludes co-working spaces we currently rent on short-term basis.