Perion Network Ltd - 1338940

Perion Network Ltd - 1338940 - 2023

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

For the month of September 2023

Commission File Number: 000-51694

Perion Network Ltd.

(Translation of registrant's name into English)

1 Azrieli Center, Building A, 4th Floor

26 HaRokmim Street, Holon, Israel 5885849

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

Explanatory Note

This Report of Foreign Private Issuer on Form 6-K (this “Form 6-K”) is being furnished by Perion Network Ltd. (“Perion”) to the Securities and Exchange Commission (the “SEC”) for the sole purposes of: (i) furnishing, as Exhibit 99.1 to this Form 6-K, unaudited condensed consolidated financial statements of Perion as of and for the six-month period ended June 30, 2023; and (ii) furnishing, as Exhibit 99.2 to this Form 6-K, Management’s Discussion and Analysis of Financial Condition and Results of Operations, which discusses and analyzes Perion’s financial condition and results of operations as of and for the six-month period ended June 30, 2023.

The following exhibits are furnished as part of this Form 6-K:

Exhibit No.	Description

99.1	Unaudited Condensed Consolidated Financial Statements for the Six Months ended June 20, 2023

99.2	Management’s Discussion and Analysis of Financial Condition and Results of Operations

101	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets, ii) Interim Consolidated Statements of Income (Loss), (iii) Interim Consolidated Statements of Comprehensive Income (Loss); (iv) Interim Consolidated Statements of Changes in Shareholders' Equity, (v) Interim Consolidated Statements of Cash Flows, and (vi) the Notes to Interim Consolidated Financial Statements

Exhibit 99.1 and 99.2 to this Report on Form 6-K shall be deemed to be incorporated by reference into Perion’s registration statements on Form F-3 (Files No. 333-254706 and 333-261541) and Form S-8 (File Nos. 333-133968, 333-152010, 333-171781, 333-188714, 333-192376, 333-193145, 333-203641, 333-208278, 333-216494, 333-237196, 333-249846, 333-262260, 333-266928 and 333-272972).

- 2 -

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PERION NETWORK LTD.

By: /s/ Maoz Sigron

Name: Maoz Sigron

Title: Chief Financial Officer

Date: September 18, 2023

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Perion Network Ltd - 1338940 - 2023

Exhibit 99.1

PERION NETWORK LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2023

IN U.S. DOLLARS

(UNAUDITED)

INDEX

	Page

Interim Consolidated Balance Sheets as of December 31, 2022 (audited) and June 30, 2023 (unaudited)	F-1

Interim Consolidated Statements of Income for the Six Months Ended June 30, 2022 (unaudited) and 2023 (unaudited)	F-2

Interim Consolidated Statements of Comprehensive Income for the Six Months Ended June 30, 2022 (unaudited) and 2023 (unaudited)	F-3

Statements of Changes in Shareholders' Equity for the Year Ended December 31, 2022 (audited) and Interim Statements of Changes in Shareholders' Equity for the Six Months Ended June 30, 2022 and 2023 (unaudited)	F-4

Interim Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 (unaudited) and 2023 (unaudited)	F-5

Notes to the Interim Consolidated Financial Statements	F-7

PERION NETWORK LTD. AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands (except share data)

	June 30,			December 31,
	2023			2022
	(Unaudited)			(Audited)
ASSETS
Current Assets
Cash and cash equivalents	$	185,928		$	176,226
Restricted cash		1,315			1,295
Short-term bank deposits		225,300			253,400
Marketable securities		72,090			-
Accounts receivable (net of allowance of $2,215 and $2,134 at June 30, 2023 and December 31, 2022, respectively)		140,734			160,488
Prepaid expenses and other current assets		18,947			12,049
Total Current Assets		644,314			603,458

Long-Term Assets
Property and equipment, net		3,181			3,611
Operating lease right-of-use assets		8,318			10,130
Intangible assets, net		45,708			51,664
Goodwill		195,527			195,527
Deferred taxes		6,414			5,779
Other assets		52			49
Total Long-Term Assets		259,200			266,760
Total Assets	$	903,514		$	870,218

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	145,639		$	155,854
Accrued expenses and other liabilities		29,861			37,869
Short-term operating lease liability		3,920			3,900
Deferred revenue		1,978			2,377
Short-term payment obligation related to acquisitions		69,333			34,608
Total Current Liabilities		250,731			234,608

Long-Term Liabilities
Payment obligation related to acquisition		-			33,113
Long-term operating lease liability		5,480			7,580
Other long-term liabilities		10,811			11,783
Total Long-Term Liabilities		16,291			52,476
Total Liabilities		267,022			287,084
Commitments and Contingencies

Shareholders' equity
Ordinary shares of ILS 0.03 par value - Authorized: 80,000,000 and 60,000,000 shares as of June 30, 2023 and December 31, 2022 respectively; Issued: 47,154,827 and 46,287,732 as of June 30, 2023 and December 31, 2022 respectively; Outstanding: 47,039,488 and 46,172,393 shares as of June 30, 2023 and December 31, 2022, respectively		405			398
Additional paid-in capital		522,217			513,534
Treasury shares at cost (115,339 shares as of June 30, 2023 and December 31, 2022)		(1,002	)		(1,002	)
Accumulated other comprehensive loss		(1,105	)		(582	)
Retained earnings		115,977			70,786
Total Shareholders' Equity		636,492			583,134
Total Liabilities and Shareholders' Equity	$	903,514		$	870,218

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 1

PERION NETWORK LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

U.S. dollars in thousands (except share and per share data)

	Six months ended
	June 30,
	2023		2022
	(Unaudited)		(Unaudited)

Revenue
Display Advertising	$	179,257	$	150,154
Search Advertising		144,363		121,817
Total Revenue		323,620		271,971

Costs and Expenses
Cost of revenue		17,148		13,474
Traffic acquisition costs and media buy		181,357		156,930
Research and development		16,589		17,369
Selling and marketing		28,812		27,293
General and administrative		13,956		12,134
Changes in fair value of contingent consideration		14,602		-
Depreciation and amortization		6,766		6,393
Total Costs and Expenses		279,230		233,593

Income from Operations		44,390		38,378
Financial income, net		8,586		1,507
Income before Taxes on income		52,976		39,885
Taxes on income		7,785		4,919
Net Income	$	45,191	$	34,966

Net Earnings per Share
Basic	$	0.97	$	0.79
Diluted	$	0.91	$	0.74

Weighted average number of shares
Basic		46,673,439		44,238,414
Diluted		49,551,061		47,210,769

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 2

PERION NETWORK LTD. AND ITS SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

U.S. dollars in thousands

	Six months ended June 30,
	2023			2022
	(Unaudited)			(Unaudited)

Net Income	$	45,191		$	34,966

Other comprehensive income (loss), net of tax:

Changes in unrealized gain (loss) on available-for-sale securities		(477	)		-

Cash flow hedge:
Changes in unrealized gain (loss)		(817	)		(1,109	)
Loss (gain) reclassified into net income		686			395

Net change		(131	)		(714	)

Change in foreign currency translation		85			(435	)

Total other comprehensive income (loss), net of tax:		(523	)		(1,149	)

Comprehensive Income	$	44,668		$	33,817

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 3

PERION NETWORK LTD. AND ITS SUBSIDIARIES

INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

U.S. dollars in thousands (except share data)

	Common shares				Additional paid-in capital		Accumulated other comprehensive income (loss)			Retained earnings (accumulated deficit)			Treasury shares			Total shareholders’ equity
	Number of Shares		$		$		$			$			$			$

Balance as of December 31, 2021 (audited)		43,696,723		375		496,154		(128	)		(28,439	)		(1,002	)		466,960

Stock-based compensation expenses		-		-		5,129		-			-			-			5,129
Proceeds from exercise of stock-based compensation		966,245		4		1,290		-			-			-			1,294
Other comprehensive loss		-		-		-		(1,149	)		-			-			(1,149	)
Net Income		-		-		-		-			34,966			-			34,966
Balance as of June 30, 2022 (unaudited)		44,662,968		379		502,573		(1,277	)		6,527			(1,002	)		507,200

Stock-based compensation expenses		-		-		6,441		-			-			-			6,441
Proceeds from exercise of stock-based compensation		1,509,425		19		4,520		-			-			-			4,539
Other comprehensive income		-		-		-		695			-			-			695
Net Income		-		-		-		-			64,259			-			64,259
Balance as of December 31, 2022 (audited)		46,172,393		398		513,534		(582	)		70,786			(1,002	)		583,134

Stock-based compensation expenses		-		-		6,502		-			-			-			6,502
Proceeds from exercise of stock-based compensation		867,095		7		2,181		-			-			-			2,188
Other comprehensive loss		-		-		-		(523	)		-			-			(523	)
Net Income		-		-		-		-			45,191			-			45,191

Balance as of June 30, 2023 (unaudited)		47,039,488		405		522,217		(1,105	)		115,977			(1,002	)		636,492

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 4

PERION NETWORK LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

U.S. dollars in thousands

	Six months ended
	June 30,
	2023			2022
	(Unaudited)			(Unaudited)
Cash flows from operating activities
Net Income	$	45,191		$	34,966

Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		6,766			6,393
Stock-based compensation expenses		6,502			5,129
Foreign currency translation		(13	)		(174	)
Accrued interest, net		(2,031	)		(1,181	)
Deferred taxes, net		(476	)		(248	)
Accrued severance pay, net		(275	)		503
Gain from sale of property and equipment		(17	)		(6	)
Net changes in operating assets and liabilities
Accounts receivable, net		19,780			29,012
Prepaid expenses and other current assets		(4,872	)		(2,686	)
Amortization of premium and accretion of discount on marketable securities, net		(516	)		-
Other assets		(3	)		8
Operating Lease right-of-use assets		1,812			1,617
Operating Lease liabilities		(2,080	)		(2,475	)
Accounts payable		(10,229	)		(11,102	)
Accrued expenses and other liabilities		(8,856	)		(6,069	)
Deferred revenues		(400	)		(1,289	)
Payment obligation related to acquisition		14,868			(3,123	)
Net cash provided by operating activities	$	65,151		$	49,275

Cash flows from investing activities
Purchases of property and equipment		(368	)		(435	)
Proceeds from sale of property and equipment		17			6
Investment in marketable securities		(95,195	)		-
Proceeds from sales and maturities of marketable securities		23,000			-
Proceeds from short-term deposits		224,900			80,000
Investment in short-term deposits		(196,800	)		(113,400	)
Cash paid in connection with acquisitions, net of cash acquired		-			(9,570	)
Net cash used in investing activities	$	(44,446	)	$	(43,399	)

Cash flows from financing activities
Proceeds from exercise of stock-based compensation		2,188			1,294
Payments of contingent consideration		(13,256	)		(9,091	)
Net cash used in financing activities	$	(11,068	)	$	(7,797	)

Effect of exchange rate changes on cash and cash equivalents and restricted cash		85			(177	)
Net increase (decrease) in cash and cash equivalents and restricted cash		9,722			(2,098	)
Cash and cash equivalents and restricted cash at beginning of period		177,521			105,535
Cash and cash equivalents and restricted cash at end of period	$	187,243		$	103,437

The accompanying notes are an integral part of the interim consolidated financial statements.

F - 5

PERION NETWORK LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

U.S. dollars in thousands

	Six months ended
	June 30,
	2023		2022
	(Unaudited)		(Unaudited)
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheet

Cash and cash equivalents	$	185,928	$	102,398
Restricted cash		1,315		1,039
Total cash, cash equivalents, and restricted cash	$	187,243	$	103,437

Supplemental Disclosure of Cash Flow Activities:

Cash paid during the period for:
Income taxes	$	12,347	$	4,159
Interest	$	-	$	3

Non-cash investing and financing activities:
Purchase of property and equipment on credit	$	13	$	83

The accompanying notes are an integral part of the consolidated financial statements.

F - 6

PERION NETWORK LTD. AND ITS SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

NOTE 1:

GENERAL

Perion Network Ltd. ("Perion") and its wholly-owned subsidiaries (collectively referred to as the "Company"), is a global multi-channel advertising technology company that delivers synergistic solutions across all major channels of digital advertising – including search, social media, display, video and connected TV (CTV). These channels converge at Perion’s intelligent HUB (iHUB), which connects the Company’s demand and supply assets, providing significant benefits to brands and publishers.

NOTE 2:

SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation of the Financial Statements

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the "SEC") regarding interim financial reporting. Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited interim consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited interim consolidated financial statements should be read in conjunction with the Company’s Annual Report on 20-F for the fiscal year ended December 31, 2022, filed with the SEC on March 15, 2023 (the "Annual Report"). The interim period results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.

There have been no changes to the significant accounting policies described in the Annual Report that have had a material impact on the unaudited interim consolidated financial statements and related notes.

Use of estimates

The preparation of the consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from those estimates.

F - 7

PERION NETWORK LTD. AND ITS SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)

On an ongoing basis, the Company's management evaluates its estimates, including those related to sales allowances and allowance for credit losses, fair value of intangible assets and goodwill, useful lives of intangible assets, fair value of share-based awards, realizability of deferred tax assets, tax uncertainties, marketable securities and contingent liabilities, among others. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable which are the basis for making judgments about the carrying values of the Company’s assets and liabilities.

Revenue recognition

The Company applies the provisions of Accounting Standards Codification 606, Revenue from Contracts with Customers ("ASC 606" or "Topic 606").

The Company applies the practical expedient for incremental costs of obtaining contracts when the associated revenue is recognized over less than one year.

The Company generates revenue primarily from two major sources:

Display Advertising Revenue (“Advertising”) - the Company generates advertising revenue from delivering high impact ad formats through different channels – display, social and video/CTV, creatively designed to capture consumer attention and drive engagement, across a hand-picked portfolio of websites and mobile applications. The Company also generates advertising revenue from content optimization solutions and services, which are recognized once the advertisement partners serve their advertisement across owned and operated properties as well as those of the Company publishers. In addition, the Company generates revenue from the use of its platform in online media channels which connects video and display advertisements derived from advertising partners to advertising inventory available within its publisher’s network.

Search Advertising Revenue (“Search Monetization”) - the Company obtains its search revenue from service agreements with its search partners. Search revenue is generated primarily from monthly transaction volume-based fees earned by the Company for making its applications available to online publishers and app developers on a revenue share basis relative to the revenue generated by the search partners.

For more disaggregated information of revenue refer to Note 11.

The Company’s payments terms are less than one year. Therefore, no finance component is recognized.

The Company evaluates whether Advertising Revenue and Search Monetization should be presented on a gross basis, which is the amount that a customer pays for the service, or on a net basis, which is the amount of the customer payment less amounts the Company pays to publishers. In making that evaluation, the Company considers whether it controls the promised good or service before transferring that good or service to the customer. The Company considers indicators such as whether the Company is the primary obligor in the arrangement and assumes risks and rewards as a principal or an agent, whether it changes the products or performs part of the service, whether the Company has discretion in establishing prices and whether it controls the underlying advertising space. The evaluation of these factors is subject to significant judgment and subjectivity.

F - 8

PERION NETWORK LTD. AND ITS SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Generally, in cases in which the Company controls the specified good or service before it is transferred to a customer, revenue is recorded on a gross basis.

Contract balances are presented separately on the consolidated balance sheets as either Accounts receivable or Deferred revenue. The Company does not have contract assets.

Accounts receivable includes amounts billed and currently due from customers.

Deferred revenue are recorded when payments are received from customers in advance of the Company's rendering of services.

Fair value of financial instruments

The carrying amounts of financial instruments carried at cost, including cash and cash equivalents, short-term deposits, restricted cash, accounts receivable, and other assets, accounts payable, accrued expenses and other liabilities approximate their fair value due to the short-term maturities of such instruments.

The Company measures its marketable securities, foreign currency derivative contracts and earn-out considerations at fair value. Marketable securities and foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. The Company's earn-out considerations were classified within Level 3.

In determining a fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability, based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect assumptions that market participants would use in pricing an asset or liability, based on the best information available under given circumstances.

The hierarchy is broken down into three levels, based on the observability of inputs and assumptions, as follows:

•

Level 1 - Observable inputs obtained from independent sources, such as quoted prices for identical assets and liabilities in active markets.

•

Level 2 - Other inputs that are directly or indirectly observable in the market place.

•

Level 3 - Unobservable inputs which are supported by little or no market activity, and unobservable inputs based on the Company's own assumptions used to measure liabilities at fair value. The inputs require significant management judgment or estimation.

F - 9

PERION NETWORK LTD. AND ITS SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Marketable Securities

Marketable securities currently are comprised of debt securities. We determine the appropriate classification of marketable securities at the time of purchase and re-evaluate such designation at each balance sheet date. In accordance with FASB ASC No. 320, “Investment Debt Securities”, we classify marketable securities as available-for-sale. Available-for-sale securities are stated at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss), a separate component of shareholders’ equity, net of taxes. Realized gains and losses on sales of marketable securities, as determined on a specific identification basis, are included in finance income, net. The amortized cost of marketable securities is adjusted for amortization of premium and accretion of discount to maturity, both of which, together with interest, are included in finance income, net. The Company has classified all marketable securities as short-term, even though the stated maturity date may be one year or more beyond the current balance sheet date, because it is probable that the Company will sell these securities prior to maturity to meet liquidity needs or as part of risk versus reward objectives.

At each reporting period, the Company evaluates whether declines in fair value below amortized cost are due to expected credit losses, as well as the Company’s ability and intent to hold the investment until a forecasted recovery occurs in accordance with ASC 326, Financial Instrument - Credit losses. Allowance for credit losses on available-for-sale marketable securities are recognized in the Company’s consolidated statements of operations, and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss) in shareholders’ equity.

The Company did not recognize an allowance for credit losses on marketable securities for the period ended June 30, 2023.

Recent Accounting Pronouncements not yet adopted

In October 2021 the FASB ASU 2021-08, Topic 805 “Business Combinations” – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments in this update require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. To achieve this, an acquirer may assess how the acquiree applied Topic 606 to determine what to record for the acquired revenue contracts. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and early adoption is permitted. The adoption of the new guidance will have an immaterial impact on its consolidated financial statements. The Company adopted ASU 2021-08 on January 1, 2023, and the adoption has an immaterial impact on its consolidated financial statements.

F - 10

PERION NETWORK LTD. AND ITS SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

NOTE 3: ACQUISITIONS

On October 4, 2021, the Company consummated the acquisition of Vidazoo Ltd., also known as “Vidazoo” (the “Vidazoo Acquisition”), a leading video technology company that enables both advertisers and publishers to deliver high impact content and advertising to consumers.

The total consideration for the acquisition was $90,038, comprised of $35,000 paid in cash at closing, contingent consideration (with a maximum amount of up to $58,545), tied to financial targets over a period of 2.25 years, estimated at fair value of $48,903 on the acquisition date ($41,054 as of June 30, 2023), and a net working capital in the amount of $6,135 which will be set-off against collection.

On May 30, 2023, the Company entered into an amendment to the SPA with Vidazoo’s sellers in connection with an additional overachievement earnout consideration in an aggregate amount of up to $10,550 payable in the Company’s ordinary shares. As of June 30, 2023, the additional overachievement contingent consideration is estimated at fair value of $6,458 which was recognized under Changes in fair value of contingent consideration in the Consolidated Statements of Income and the aggregate contingent consideration is estimated at fair value of $47,512.

NOTE 4: MARKETABLE SECURITIES

The following is a summary of available-for-sale marketable securities by investment categories and contractual maturities as of June 30,2023:

	June 30, 2023
	Amortized cost		Gross unrealized gain		Gross unrealized loss			Fair value

Matures within one year:
Corporate debentures	$	18,312	$	3	$	(67	)	$	18,248
Government debentures		12,205				(53	)		12,152
	$	30,517	$	3	$	(120	)	$	30,400
Matures after one year through three years:
Corporate debentures	$	15,985	$	1	$	(165	)	$	15,821
Government debentures		26,208		-		(339	)		25,869
	$	42,193	$	1	$	(504	)	$	41,690

Total	$	72,710	$	4	$	(624	)	$	72,090

As of June 30, 2023, the Company had no investments with unrealized loss for more than 12 months.

As of June 30, 2023, no credit loss impairment was recorded regarding the available for sale marketable securities

F - 11

PERION NETWORK LTD. AND ITS SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

NOTE 5: FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table present assets and liabilities measured at fair value on a recurring basis as of June 30, 2023:

	June 30, 2023
	Fair value measurements using input type
	Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale marketable securities marketable securities:	$	-	$	72,090	$	-	$	72,090

Total financial assets	$	-	$	72,090	$	-	$	72,090

Liabilities:
Derivative liability	$	-	$	363	$	-	$	363
Contingent consideration in connection to the acquisitions		-		-		65,333		65,333

Total financial liabilities	$	-	$	363	$	65,333	$	65,696

The following table present assets and liabilities measured at fair value on a recurring basis as of December 31, 2022:

	December 31, 2022
	Fair value measurements using input type
	Level 1		Level 2		Level 3		Total
Assets:
Derivative assets	$	-	$	7	$	-	$	7

Total financial assets	$	-	$	7	$	-	$	7

Liabilities:
Derivative liabilities	$	-	$	239	$	-	$	239
Contingent consideration in connection to the acquisitions		-		-		63,695		63,695

Total financial liabilities	$	-	$	239	$	63,695	$	63,934

F - 12

PERION NETWORK LTD. AND ITS SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

NOTE 5: FAIR VALUE OF FINANCIAL INSTRUMENTS (Cont.)

The following table sets forth a summary of the changes in the fair value of the contingent consideration:

Fair value as of December 31, 2022	$	63,695
Payments of contingent consideration		(13,256	)
Changes in fair value of contingent consideration		14,602
Revaluation of acquisition-related contingent consideration		292
Fair value as of June 30, 2023	$	65,333

NOTE 6: GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

The changes in the net carrying amount of goodwill in 2022 and six months ended June 30, 2023 were as follows:

Balance as of January 1, 2022	$	189,265

Vidazoo measurement period adjustments	$	6,262

Balance as of December 31, 2022	$	195,527

Balance as of June 30, 2023	$	195,527

Goodwill has been recorded as a result of prior acquisitions and represents excess of the consideration over the net fair value of the assets of the businesses acquired. As of June 30, 2023, the Company had two reporting units – Display Advertising and Search Advertising. The Company performs tests for impairment of goodwill at the reporting unit level at least annually, or more frequently if events or changes in circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying value. As of June 30, 2023, the Company determined that there were no indicators of potential impairment with regards to its reporting units which required interim goodwill impairment analysis.

F - 13

PERION NETWORK LTD. AND ITS SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

NOTE 6: GOODWILL AND INTANGIBLE ASSETS, NET (Cont.)

Intangible assets, net

The following is a summary of intangible assets as of June 30, 2023:

	December 31, 2022			Amortization			June 30, 2023

Acquired technology	$	89,775		$	-		$	89,775
Accumulated amortization		(41,023	)		(4,811	)		(45,834	)
Impairment		(8,749	)		-			(8,749	)
Acquired technology, net		40,003			(4,811	)		35,192

Customer relationships		46,544			-			46,544
Accumulated amortization		(24,976	)		(1,018	)		(25,994	)
Impairment		(10,426	)		-			(10,426	)
Customer relationships, net		11,142			(1,018	)		10,124

Tradename and other		18,503			-			18,503
Accumulated amortization		(12,874	)		(127	)		(13,001	)
Impairment		(5,110	)		-			(5,110	)
Tradename and other, net		519			(127	)		392

Intangible assets, net	$	51,664		$	(5,956	)	$	45,708

F - 14

PERION NETWORK LTD. AND ITS SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

NOTE 6: GOODWILL AND INTANGIBLE ASSETS, NET (Cont.)

The following is a summary of intangible assets as of December 31, 2022:

	December 31, 2021			Vidazoo measurement period adjustments		Amortization			December 31, 2022

Acquired technology	$	84,417		$	5,358	$	-		$	89,775
Accumulated amortization		(31,137	)		-		(9,886	)		(41,023	)
Impairment		(8,749	)		-		-			(8,749	)
Acquired technology, net		44,531			5,358		(9,886	)		40,003

Customer relationships		45,054			1,490		-			46,544
Accumulated amortization		(23,218	)		-		(1,758	)		(24,976	)
Impairment		(10,426	)		-		-			(10,426	)
Customer relationships, net		11,410			1,490		(1,758	)		11,142

Tradename and other		18,503			-		-			18,503
Accumulated amortization		(12,634	)		-		(240	)		(12,874	)
Impairment		(5,110	)		-		-			(5,110	)
Tradename and other, net		759			-		(240	)		519

Intangible assets, net	$	56,700		$	6,848	$	(11,884	)	$	51,664

F - 15

PERION NETWORK LTD. AND ITS SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

NOTE 7:

SHAREHOLDERS' EQUITY

Ordinary shares

The ordinary shares of the Company entitle their holders to voting rights, the right to receive cash dividend and the right to a share in excess assets upon liquidation of the Company.

Share Options, Restricted Share Units and Warrants

In 2003, the Company's Board of Directors approved the 2003 Equity Incentive Plan (the "Plan") for an initial term of ten years from adoption and on December 9, 2012, extended the term of the Plan for an additional ten years. On November 7, 2022 the Compensation Committee approved to extend the term of the Incentive Plan for an additional period of two years, expiring on December 9, 2024.

On August 7, 2013, the Company’s Board of Directors approved amendments to the Plan which include the ability to grant RSUs and restricted shares.

The contractual term of the share options is generally no more than seven years and the vesting period of the options and RSUs granted under the Plan is between one and three years from the date of grant. The rights of the ordinary shares issued upon the exercise of share options or RSUs are identical to those of the other ordinary shares of the Company.

As of June 30, 2023, there were 1,010,167 ordinary shares reserved for future share-based awards under the Plan.

The following table summarizes the activities for the Company’s service-based share options and RSU’s for the six months ended June 30, 2023:

				Weighted average
	Number of options			Exercise price		Remaining contractual term (in years)		Aggregate intrinsic value

Outstanding at January 1, 2023		3,064,674		$	1.39		59.70	$	73,284
Granted		293,489			0.01		-		-
Exercised		(691,451	)		2.72		-		22,228
Cancelled		(123,332	)		0.11		-		-
Outstanding at June 30, 2023		2,543,380		$	0.93		65.30	$	75,649

Exercisable at June 30, 2023		348,455		$	5.16		2.93	$	8,889

Vested and expected to vest at June 30, 2023		2,786,069		$	0.95		0.48	$	149,576

F - 16

PERION NETWORK LTD. AND ITS SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

NOTE 7: SHAREHOLDERS' EQUITY (Cont.)

The following table summarizes the activities for the Company’s performance-based share options and RSU’s for the six months ended June 30, 2023:

				Weighted average
	Number of options			Exercise price		Remaining contractual term (in years)		Aggregate intrinsic value

Outstanding at January 1, 2023		592,511		$	0.51		70.64	$	14,690
Granted		112,500			0.01		-		-
Exercised		(175,644	)		1.71		-		5,982
Cancelled		(21,901	)		0.01		-		-
Outstanding at June 30, 2023		507,466		$	0.01		77.00	$	15,564

Exercisable at June 30, 2023		-			-		-		-

Vested and expected to vest at June 30, 2023		493,272		$	0.01		-	$	30,693

The performance-based share options’ vesting is contingent upon achieving specific financial targets of the Company, set at the grant date.

NOTE 8: INCOME TAXES

The Company had a tax expense of $7,785 and $4,919 for the six months ended June 30, 2023 and 2022, respectively.

F - 17

PERION NETWORK LTD. AND ITS SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

NOTE 9: EARNINGS PER SHARE

The table below presents the computation of basic and diluted net earnings per common share:

	Six months ended June 30,
	2023		2022
Numerator:
Net income attributable to ordinary shares – basic and diluted	$	45,191	$	34,966

Denominator:
Number of ordinary shares outstanding during the period		46,673,439		44,238,414

Weighted average effect of dilutive securities:
Employee options and restricted share units		2,877,622		2,972,355

Diluted number of ordinary shares outstanding		49,551,061		47,210,769

Basic net earnings per ordinary share	$	0.97	$	0.79

Diluted net earnings per ordinary share	$	0.91	$	0.74

Potential ordinary shares equivalents excluded because their effect would have been anti-dilutive		173,224		929,784

F - 18

PERION NETWORK LTD. AND ITS SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share and per share data)

NOTE 10: MAJOR CUSTOMER

A substantial portion of the Company's revenue is derived from search fees and online advertising, the market for which is highly competitive and rapidly changing. Significant changes in this industry or in customer buying behavior would adversely affect the Company’s operating results.

The following table sets forth the customers that represent 10% or more of the Company’s total revenues in each of the periods presented below:

	Six months ended June 30,
	2023		2022

Customer A		29%		35%
Customer B		14%		Less than 10%

NOTE 11: GEOGRAPHIC INFORMATION

The following table presents the total revenues for six months ended June 30, 2023 and 2022, allocated to the geographic areas in which they were generated:

	Six months ended June 30,
	2023		2022

North America (mainly U.S.)	$	279,106	$	234,918
Europe		34,897		30,767
Other		9,617		6,286

	$	323,620	$	271,971

The following table presents the locations of the Company’s long-lived assets as of June 30, 2023 and December 31, 2022:

	June 30,		December 31,
	2023		2022

Israel	$	5,022	$	6,176
U.S.		6,362		7,427
Europe		115		138

	$	11,499	$	13,741

F - 19

Exhibit 99.2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations provides information that we believe to be relevant to an assessment and understanding of our results of operations and financial condition for the periods described. This discussion should be read in conjunction with our condensed consolidated interim financial statements and the notes to the financial statements, which are included in this Report of Foreign Private Issuer on Form 6-K. In addition, this information should also be read in conjunction with the information contained in our Annual Report on Form 20-F for the year ended December 31, 2022, filed with the Securities and Exchange Commission on March 15, 2023 (the “Annual Report”), including the consolidated annual financial statements as of December 31, 2022 and their accompanying notes included therein.

Forward-Looking Statements

This Report of Foreign Private Issuer on Form 6-K contains historical information and forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 with respect to the business, financial condition and results of operations of Perion. The words “will,” “believe,” “expect,” “intend,” “plan,” “should,” “estimate” and similar expressions are intended to identify forward-looking statements. Such statements reflect the current views, assumptions and expectations of Perion with respect to future events and are subject to risks and uncertainties. Many factors could cause the actual results, performance or achievements of Perion to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, or financial information, including, but not limited to, the failure to realize the anticipated benefits of companies and businesses we acquired and may acquire in the future, risks entailed in integrating the companies and businesses we acquire, including employee retention and customer acceptance; the risk that such transactions will divert management and other resources from the ongoing operations of the business or otherwise disrupt the conduct of those businesses, potential litigation associated with such transactions, and general risks associated with the business of Perion including intense and frequent changes in the markets in which the businesses operate and in general economic and business conditions, loss of key customers, data breaches, cyber-attacks and other similar incidents, unpredictable sales cycles, competitive pressures, market acceptance of new products, changes in applicable laws and regulations as well as industry self-regulation, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, whether referenced or not referenced in this Report of Foreign Private Issuer on Form 6-K. Various other risks and uncertainties may affect Perion and its results of operations, as described in reports filed by Perion with the Securities and Exchange Commission from time to time, including its Annual Report. Perion does not assume any obligation to update these forward-looking statements.

The terms “Perion,” “Company,” “we,” “us” or “our” in this Report of Foreign Private Issuer on Form 6-K refer to Perion Network Ltd. and its subsidiaries, unless the context otherwise requires.

General

Perion is a global multi-channel advertising technology company that delivers synergistic solutions across all major channels of digital advertising – including search, social media, display, video and connected TV (CTV). These channels converge at Perion’s intelligent HUB (iHUB), which connects the Company’s demand and supply assets, providing significant benefits to brands and publishers.

The Company’s scale and growth have been, and continue to be, made possible by our technology leadership, which enables us to operate successfully across all the major channels of digital advertising. These represent an addressable market of $602 billion in 2023, which is expected to grow to $871 billion by 2027, according to eMarketer.

Our presence across all major digital advertising channels provides diversification of our revenue streams and market agility. This has enabled us to rapidly capitalize on shifts in budget allocation and respond in a timely manner. As brands and marketers gain better visibility into how their media spending impacts business results, spending across channels is expected to evolve further, which puts Perion in an even more well-advantaged market position.

Our multi-channel digital technology comprises advertiser solutions and publisher solutions designed for various verticals, channels, and platforms.

Our advertiser solutions equip brands and agencies with cross-channel, high-impact advertising through the open web and programmatic platforms. These include custom full-funnel omni-channel experiences, including video across all screens, advanced CTV solutions, such as real-time dynamically optimized creatives to form a personalized experience, solutions for live broadcasts, interactive brand experiences, and more. Additional solutions for advertisers include social display formats, a data-backed platform, and custom content packages.

Our publisher solutions are deployed across different platforms and assets, through our technologies and expertise in search advertising, Video and Display. Our Search business is a direct-response platform that works with a range of different publishers; and our Display and Video solution for publishers is focused on providing the highest yield through brand advertisement at scale.

Perion’s advanced and integrated technological solutions provide value to our clients across the most important points in the consumer journey and marketing funnel. Each solution has been built to deliver optimized value to our customers, which has enabled us to expand both topline revenue and margins. Perion’s growth and efficient operations are demonstrated through the capabilities described below.

1.	The ability to monetize search traffic through our partnership with Microsoft Advertising (Bing) and other search providers, as reflected in the consistent growth of our publisher network;
2.	The ability to meet advertiser’s needs for higher sustained user engagement with our proven high-impact ad suite;
3.	The ability to monetize the fast-growing retail media segment, having rapidly succeeded in attracting significant retail customers;
4.	The ability to innovate and implement AI-driven solutions where it matters most to brands, including our creative platforms which produces thousands of dynamic creative ad permutations;
5.	Our AI-based cookieless targeting solution, SORT^®, designed for an effective and successful response to intensifying privacy concerns and the upcoming deprecation of cookies by Google. SORT^® Delivers Superior Results While Respecting Privacy

SORT^® - which stands for “Smart Optimization of Relevant Traits” – not only delivers better click-through rate (“CTR”) than third party cookies but has been shown to outperform first-party cookies. This has been validated through real-time comparison tests completed by Neutronian, a respected third-party research firm.

While cookies are currently an essential part of the infrastructure of the digital advertising market, they are under increasing public and legislative pressure for user privacy concerns. Thus, SORT^® provides a competitive solution that could enable Perion to capture additional revenue as brands and advertisers move away from traditional data capture methods.

Further, SORT^®, which was recently awarded Digiday’s prestigious award for the industry’s best cookieless identification technology solution, does not collect or store any user data the way other cookie-less solutions do, giving it a unique position as a superior, competitively advantaged replacement for third-party cookies. The award recognized the dramatic and measurable success of the digital campaign we created for Mercedes-Benz USA (MBUSA) utilizing SORT^®, for driving interest in MBUSA’s CPO vehicles while achieving high standards of privacy.

Thanks to a proprietary “Privacy Shield” graphic logo that is incorporated into every ad unit running through SORT^®, consumers are made aware that a brand campaign is running through SORT^®, and hence the ads are safe to click. SORT^® is a solution that provides consumers with visible confidence they won’t be followed around the web as their behavior is being tracked.

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iHub Provides a Breadth of Operational Support and Activation that Accrue to the Benefit of Both the Company and Its Clients

Our iHUB, is a centralized and intelligent data structure that connects the supply side and demand side assets of Perion, processing billions of signals from across our network and properties. This provides five levels of value: operational savings in the form of shared resources; reduced traffic acquisition costs and media buying optimization; increased customer value; market agility and creative firepower, as further described below.

1.	Operational Savings – Shared Resources

The iHUB plays a central function role in Perion’s activities, acting as a shared infrastructure resource consisting of an ad-server, as well as a real-time bidding engine, a smart data layer, and a sophisticated reporting mechanism. This efficiency eliminates excessive expenses that would otherwise be incurred if business units had to develop separate infrastructures.

2.	Traffic Acquisition Costs and Media Buy (TAC) Optimization

The iHUB allows our business units to quickly balance and harmonize demand and supply, providing optimum utilization of our owned and operated supply, as well as what is available on the open web. This enables us to serve direct demand in a closed loop, generating superior efficiency and hence performance. This optimization is enhanced by our ability to offer publishers and advertisers multiple ad products to support their marketing efforts which enables us to increase market share with current and new clients.

3.	Increased Customer Value

Our advertisers benefit from both the large scale and the broad reach Perion offers, with enhanced matching based on a segment-by-segment method. This is made possible by our cross-company data layer, which provides significant value to our publishers, delivering more opportunities to monetize their inventory and generate incremental revenue. Our unified platform multiples ad products, from different business units, for ongoing, real-time dynamic creative optimization.

4.	Market Agility

Rapid shifts in media spending are the new normal, as brands have gained the insights and internal capabilities to allocate media on close to a real-time basis. As an agility enabler, our iHub plays a pivotal role in making it possible for our clients to identify the most cost-efficient opportunities for the successful implementation of their marketing initiatives.

- 3 -

5.	Creative Firepower

The same underlying AI and machine learning that enables the iHub to orchestrate the supply and demand sides of the market, gives it the ability to execute, on a rapidly iterative basis, the high-impact ad units we are well-known for. Our Dynamic Creative Optimization engine brings our clients the ability to go beyond traditional A/B testing, and expose multiple ad units to different audiences, for high-speed, high-scale optimization of the best-performing creative units. The high-impact units that are part of this process are proprietary to Perion.

In summary, Perion continues to be well-positioned to benefit from the overall growth of the digital marketplace, through our diversified business solutions that allow us to rapidly react to advertisers’ budget shifts.

Given we are not reliant on a single-point solution, and our solutions are competitively positioned, we believe that Perion’s solutions will be able to attract advertisers from less-effective competitors.

Results of Operations

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022

Revenue. Revenue increased by 19%, from $272.0 million in the six-month period ended June 30, 2022 to $323.6 million in the six-month period ended June 30, 2023.

Search Advertising revenue. Search Advertising revenue increased by 19%, from $121.8 million in the six-month period ended June 30, 2022 to $144.4 million in the six-month period ended June 30, 2023. This increase was primarily a result of a 57% increase in average daily commercial searches and a 29% increase in the number of publishers.

Display Advertising revenue. Display Advertising revenue increased by 19%, from $150.2 million in the six-month period ended June 30, 2022 to $179.3 million in the six-month period ended June 30, 2023. This increase was a result of a 20% increase in video revenue and a 54% increase in CTV¹ revenue.

Cost of revenue. Cost of revenue increased by 27%, from $13.5 million in the six-month period ended June 30, 2022 to $17.1 million in the six-month period ended June 30, 2023 and remained stable at 5% of revenue for both periods. The increase in cost of revenue expenses was primarily as a result of increased headcount, hosting and data verification and targeting software expenses which was aligned with the increase in the Company’s revenue.

Traffic acquisition costs and media buy (“TAC”). TAC increased by 16%, from $156.9 million or 58% of revenue in the six-month period ended June 30, 2022 to $181.4 million or 56% of revenue in the six-month period ended June 30, 2023. The margin expansion was primarily due to improved product mix in addition to media buying optimization, enabled by leveraging data and buying power.

¹As previously disclosed, we changed our methodology for measuring our CTV activity. We moved from measuring CTV campaigns to measuring CTV channels. The CTV growth trend under both methodologies remains in the same trajectory. Under our updated methodology, revenue generated from CTV in the six months ended on June 30, 2022 was $7.2 million vs. $10.6 million under the previous methodology

- 4 -

Research and development expenses (“R&D”). R&D expenses decreased by 5%, from $17.4 million, or 6% of revenue in the six-month period ended June 30, 2022 to $16.6 million, or 5% of revenue in the six-month period ended June 30, 2023. The decrease was primarily due to employee-related costs resulting from exchange rate fluctuations.

Selling and marketing expenses (“S&M”). S&M expenses increased by 5%, from $27.3 million, or 10% of revenue in the six-month period ended June 30, 2022 to $28.8 million, or 9% of revenue in the six-month period ended June 30, 2023. The increase was primarily due to higher commissions aligned with the increase in revenue, as well as an increase in our marketing expenses.

General and administrative expenses (“G&A”). G&A increased by 16%, from $12.1 million, in the six-month period ended June 30, 2022 to $14.0 million in the six-month period ended June 30, 2023 and remained stable at 4% of revenue in both periods. The increase was primarily due to an increase in our headcount as well as higher expenses in software and hardware, which were incurred to bolster our security initiatives.

Changes in fair value of contingent consideration. Changes in fair value of contingent consideration in the six-month period ended June 30, 2023 include a $14.6 million fair-value adjustment of the contingent consideration payable in respect to the acquisition of Vidazoo Ltd. (“Vidazoo”) due to Vidazoo’s performance overachievement and an amendment to the share purchase agreement entered into effect on June 14, 2023.

Depreciation and amortization. Depreciation and amortization expenses in the amount of $6.4 million in the six-month period ended June 30, 2022 and $6.8 million in the six-month period ended June 30, 2023. Depreciation and amortization consist primarily of depreciation of our property and equipment and the amortization of our intangible assets as a result of our acquisitions. The increase is primarily attributable to the amortization of the acquired intangible assets derived from Vidazoo acquisition.

Financial income, net. Financial income increased by $7.1 million from $1.5 million in the six-month period ended June 30, 2022 to $8.6 million in the six-month period ended June 30, 2023, mainly due to interest income earned on cash invested in bank deposits and marketable securities which yielded a higher interest rate.

Taxes on Income. Taxes on income increased by $2.9 million from $4.9 million, in the six-month period ended June 30, 2022 to $7.8 million in the six-month period ended June 30, 2023 and remained stable at 2% of revenue in both periods. The increase was primarily due to higher pretax income and a one-time recognition of earnout contingent expenses which are non-deductible for tax purposes, offset by an increase in tax deductible assets.

- 5 -

Liquidity and Capital Resources

As of June 30, 2023, we had $483.3 million in cash, cash equivalents, short-term bank deposits and marketable securities compared to $429.6 million as of December 31, 2022. The $53.7 million increase is primarily the result of $65.2 million net cash provided by operating activities, partially offset by $13.3 million cash paid in connection with contingent consideration related to previous acquisitions.

Net cash provided by operating activities

For the six months ended June 30, 2023, our operating activities provided cash in the amount of $65.2 million, primarily as result of a net income in the amount of $45.2 million, increased by non-cash expenses, depreciation and amortization of $6.8 million, stock-based compensation expenses of $6.5 million and a net change of $9.5 million in operating assets and liabilities, offset by $2.0 million change of accrued interest, net.

For the six months ended June 30, 2022, our operating activities provided cash in the amount of $49.3 million, primarily as result of a net income in the amount of $35.0 million, increased by non-cash expenses, depreciation and amortization of $6.4 million, stock-based compensation expenses of $5.1 million and a net change of $3.9 million in operating assets and liabilities.

Net cash used in investing activities

In the six months ended June 30, 2023, we used in our investing activities $44.4 million, primarily due to $72.2 million purchase of marketable securities, net of sales, offset by $28.1 million of proceeds from short-term deposits, net.

In the six months ended June 30, 2022, we used in our investing activities $43.4 million cash, primarily due to $33.4 million investment in short-term deposits, and $9.6 million paid in connection with acquisitions.

Net cash provided by used in financing activities

In the six months ended June 30, 2023, we used in our financing activities $11.1 million cash, primarily due to $13.3 million cash paid related to contingent consideration payments in respect to previous acquisitions offset by $2.2 million proceeds from exercise of stock-options.

In the six months ended June 30, 2022, we used in our financing activities $7.8 million cash, primarily due to $9.1 million related to contingent consideration payments in respect to previous acquisitions offset by $1.3 million proceeds from exercise of stock-options.

Research, Development, Patents and Licenses, Etc.

There have been no material changes to our research and development activities from those reported under “Item 5.C.—Research, Development, Patents and Licenses, Etc.” in the Annual Report.

Off-Balance Sheet Arrangements

As of the date of this discussion and analysis, we do not have any, and during the periods presented we did not have any, off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial conditions, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Critical Accounting Estimates

There have been no material changes to the significant accounting estimates described in “Item 5.F. — Critical Accounting Policies and Estimates” in the Annual Report.

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