Perion Network (NASDAQ: PERI) reported Q4 EPS of $0.21, $0.06 better than the analyst estimate of $0.15. Revenue for the quarter came in at $72 million versus the consensus estimate of $74.25 million.

Doron Gerstel, Perion’s CEO stated, “We enter 2019 with a significantly strengthened financial position as a result of the successful completion of the first phase of our three-phase turnaround strategy. We have reduced Perion’s operating expenses by 21% from $108.4 million in 2017 to $86.0 million in 2018 and in so doing, we have extended the runway to continue the investments in technology that are necessary to reposition Perion for long-term growth. In addition, we have also successfully consolidated our debt facilities by extending the maturity date, redistributing principal payments of the loan to improve Perion’s financial flexibility and to more efficiently manage our growing cash position. Over the past 24 months, we have reduced the previous debt by 48% from $77.7 million to $40.5 million, and our current cash position exceeds debt for the second consecutive quarter since 2015.”

“Encouraged by the feedback and interest we have received from customers on Undertone’s new Synchronized Digital Branding solution, which we introduced in early 2018, we have made the strategic decision to allocate additional R&D resources to further enhance Undertone’s core technology in 2019,” added Mr. Gerstel. “The goal of these investments is to further differentiate our offering and better meet the needs of our clients which will position us to capture a larger share of advertisers spend.”

“We have also reaffirmed our strategic decision to not degrade the quality of Undertone’s premium offerings by filling a short-term gap with lower value ad units,” continued Mr. Gerstel. “This decision will preserve the superior results we deliver to our clients and with it, maintain our high margins – even though it has and will continue to impact our top-line results in the near-term. We are managing our business for earnings and are prepared to see this transition through as we leverage our strong cash generation to strengthen our product offering and position Undertone for new growth opportunities.”

Mr. Gerstel concluded, “Under fresh leadership in our CodeFuel business, we are finding new revenue opportunities for our industry-leading platform, while maintaining and in fact deepening a strong and strategically important relationship with Microsoft’s Bing. CodeFuel continues to generate significant cash flow, enabling us to invest even further in our advertisement business. This business has been resilient, and our strong relationship with Bing suggests continued strength and cash generation for the foreseeable future.”

2019 Guidance:

Management expects to generate Adjusted EBITDA of $22 million to $24 million for the full year of 2019.

Gerstel concluded, “Our efforts to strengthen Perion’s financial position and streamline our operations in 2018 have provided us with the necessary foundation to advance investments in growth. We expect 2019 to be a year of continued transition as we prioritize margins and profitability over sales while introducing new offerings that will be the catalyst for future growth.”

For earnings history and earnings-related data on Perion Network (PERI) click here.