This wasn't a one-time hit. Perion warned that the impact would be continuous, cutting its 2024 revenue guidance from $860-880 million to $590-610 million. The stock plummeted 40% in a day, taking the market cap below $600 million. At its peak in March 2023, the company had been worth more than three times that amount.
The damage showed up in the numbers immediately. Revenue fell from $743.2 million in 2023 to $498.3 million in 2024, then to $439.9 million in 2025. Profit after tax collapsed from $115 million to $12.6 million, turning into a $7.9 million loss in 2025. Search advertising, which had been 46% of 2023 revenue with Microsoft accounting for 85% of that segment, shrank from $82 million in Q1 2024 to just $19.6 million in Q1 2025.
Perion didn't sit idle. Under CEO Tal Jacobson, the company pushed into connected TV (CTV), digital out-of-home (DOOH), retail media, and its Perion One unified platform. By Q2 2026, these channels were growing fast. CTV spend jumped 56%, DOOH 45%, retail media 60%, and the Outmax AI agent 136% year-on-year. Perion One spend grew 15% to $156.7 million.
But the math was brutal. The non-search business was flat year-over-year in the first half of 2025 at $150.3 million, while search revenue crashed by $74 million. The new channels were growing off a small base and carried higher costs. Selling and marketing expenses were rising, and while Contribution ex-TAC (revenue after traffic acquisition costs) hit $42.3 million in Q2 2026 with a 43% margin, Adjusted EBITDA was only $2.8 million, down 61% from the previous year.
The company faced a classic capital allocation dilemma. It spent roughly $85.5 million over nine months of 2026 on share buybacks and the acquisition of PRN, an in-store advertising network. That cash wasn't available to accelerate the CTV and DOOH pivot. Meanwhile, the search business couldn't be "saved" by investment because Microsoft controlled the pricing and terms. Perion was essentially a tenant on someone else's platform, and the landlord changed the rent.
The market had lost faith in management's ability to execute the turnaround. Analysts noted that Perion's story had become a question of trust, with the company holding nearly $480 million in gross cash in 2024 but no clear plan to deploy it beyond buybacks.
The $420 million equity value meant Affle was paying about $192 million for the operating business net of cash, or roughly 3.7 times Perion's 2026 Adjusted EBITDA guidance of $51-53 million. This was a fire sale price for a company that had once been a high-flying ad-tech star.
So why did Affle, an Indian mobile advertising company, pull the trigger? The answer lies in the strategic fit. Affle specializes in "cost per converted user" (CPCU) models, primarily in emerging markets. Perion brought a strong presence in developed markets, particularly North America, and technology across CTV, DOOH, and retail media. Affle sees an opportunity to combine Perion's upper-funnel awareness capabilities with its own deeper-funnel mobile conversion engine, creating synergies across e-commerce, retail, and healthcare.
Affle also projects a FY2028 revenue run rate of over $700 million for the combined entity.
The deal structure speaks volumes about Affle's confidence. Citibank is providing debt financing, and crucially, the transaction is not subject to a financing condition. Affle expects to be net debt-free immediately after closing, using Perion's own cash to offset the acquisition debt. This suggests Affle sees strong cash flow generation potential from the integrated business, despite Perion's recent struggles.
Perion's board unanimously approved the deal but included a 40-day "go-shop" period expiring December 11, 2026, allowing the company to solicit superior proposals. This is a standard fiduciary move, but the board's statement that the deal offers "compelling value and greater financial certainty" suggests it saw limited alternatives. The market will be watching to see if another bidder emerges, but the 34.5% premium to a depressed stock price sets a high bar.
Upon closing, expected in early 2027, Perion will be delisted from Nasdaq and the Tel Aviv Stock Exchange, becoming a wholly-owned subsidiary of Affle while retaining its brand. Shareholders will receive $11.70 in cash per share, with no remaining public equity in Perion. The company will lose its independent access to public capital markets, but given its deteriorating standalone prospects, that may be a moot point.
Perion's story is a cautionary tale about platform dependency in the ad-tech industry. When you build your business on top of Microsoft or Google, you're building on rented land. The landlord can change the rules overnight, and there's little you can do about it. Perion's diversification into CTV and DOOH was the right strategic move, but it came too late and couldn't offset the collapse of the search cash cow quickly enough.
For Affle, this is a calculated gamble. The company is buying Perion at a distressed price, betting that its CPCU model and operational discipline can unlock value that Perion's management couldn't realize on its own. If successful, Affle will gain a global omnichannel platform with a strong foothold in developed markets. If not, it will have paid nearly $200 million for a business that was already struggling to find its footing.
The next few months will be critical. The go-shop period will test whether anyone else sees hidden value in Perion. The regulatory approvals will determine if the deal can close as planned. And once the integration begins, the market will watch closely to see if Affle can actually deliver on its promise of turning Perion's diversified but unprofitable growth into a sustainable, profitable machine.
