Perion Network

Foreign Filer Report • Aug 11, 2025

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington,, D..C.. 2200554499

FORM 66--K

Report of Foreign Private Issuer

Pursuant to Rule 1133a--1166 or 1155d--1166 under the Securities Exchange Act of 11993344

For the month of August 22002255

Commission File Number:: 000000--5511669944

Perion Network Ltd..

((Translation of registrant''s name into English))

22 Leonardo Da Vinci Street,, 2244th Floor Tel Aviv,, Israel 66447733330099

((Address of principal executive offices))

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 2200--F or Form 4400--F..

Form 2200--F ☒ Form 4400--F ☐

Explanatory Note

On August 1111,, 22002255,, Perion Network Ltd.. ((the "Registrant" or "Perion")) issued a press release titled "Perion Reports Second Quarter 22002255 Results ".. A copy of this press release is furnished as Exhibit 9999..11 herewith..

The GAAP financial statements tables contained in the press release attached to this Report on Form 66--K are incorporated by reference into the Registrant's registration statements on Form S--88 ((Files No.. 333333--226622226600,, 333333--226666992288,, 333333--227722997722,, 333333--227799005555,, 333333--228822664499,, 333333--228844001111 and 333333--228877442266))))..

Signature

Pursuant to the requirements of the Securities Exchange Act of 11993344,, the Registrant has duly caused this report to be signed on its behalf by the undersigned,, thereunto duly authorized..

PERION NETWORK LTD..

By:: //s// Elad Tzubery Name:: Elad Tzubery Title:: Chief Financial Officer

Date:: August 1111,, 22002255

Exhibit 9999..11

Perion Reports Second Quarter 22002255 Results

Revenue of \$\$110033 Million,, Advertising Solutions grew 88%% YoY,, first increase since Q33'2233 Perion One platform continues to expand,, introducing Performance CTV solution Strong cash flow from operations and adjusted free cash flow

New York && Tel Aviv– August 1111,, 22002255 – Perion Network Ltd.. ((NASDAQ and TASE:: PERI)),, a leader in advanced technology solving for the complexities of modern advertising,, today reported its financial results for the second quarter ended June 3300,, 22002255..

Second Quarter 22002255 Financial Highlights¹

In millions,,
except per share data				Three months ended				Six months ended
				June 3300,,		June 3300,,
		22002255		22002244	%%	22002255		22002244	%%
Advertising Solutions Revenue	\$\$	880066	\$\$	774444	88 %% \$\$	11550033	\$\$	11550022	00 %%
Search Advertising Revenue	\$\$	222244	\$\$	334433	--3355 %% \$\$	442200	\$\$	11116644	--6644 %%
Total Revenue	\$\$	11003300	\$\$	11008877	--55 %% \$\$	11992233	\$\$	22666655	--2288 %%
Contribution ex--TAC ((Revenue ex--TAC))	\$\$	447766	\$\$	449988	--44 %% \$\$	887733	\$\$	11110000	--44 %%
GAAP Net Income ((Loss))	\$\$	((3355 ))	\$\$	((6622 ))	4444 %% \$\$	((111188 ))	\$\$	5566	NM
Non--GAAP Net Income	\$\$	112200	\$\$	113344	--1111 %% \$\$	117733	\$\$	336600	--5522 %%
Adjusted EBITDA	\$\$	7711	\$\$	7777	--88 %% \$\$	8899	\$\$	228800	--6688 %%
Adjusted EBITDA to Contribution ex--TAC		1155 %%		1155 %%		1100 %%		2255 %%
Net Cash from Operations	\$\$	221133	\$\$	((220055 ))	NM \$\$	114422	\$\$	((113366 ))	NM
Adjusted Free Cash Flow	\$\$	220077	\$\$	((111144 ))	NM \$\$	113333	\$\$	((4499 ))	NM
GAAP Diluted EPS	\$\$	((000088 ))	\$\$	((001133 ))	3388 %% \$\$	((002277 ))	\$\$	001111	NM
Non--GAAP Diluted EPS	\$\$	002266	\$\$	002266	00 %% \$\$	003366	\$\$	007711	--4499 %%

11 Contribution ex--TAC,, non--GAAP Net Income,, Adjusted EBITDA,, Adjusted Free Cash Flow and non--GAAP Diluted EPS are non--GAAP measures.. See below reconciliation of GAAP to non-- GAAP measures..

Business && Financial Highlights

• Advertising Solutions revenue increased 88%%,, first YoY gain since Q33'2233
• Strong operating cash flow and adjusted free cash flow of \$\$2211..33 million and \$\$ 2200..77 million,, respectively
• Channels
  • o DOOH revenue increased 3355%% YoY to \$\$1177..66 million
  • o Web revenue increased 55%% YoY to \$\$5533..11 million
  • o CTV revenue decreased 55%% YoY to \$\$99..77 million
  • o Search revenue decreased 3355%% YoY to \$\$2222..44 million
• Retail Media² vertical revenue increased 2277%% YoY to \$\$2222..33 million
• Greenbids synergies on track,, winning custom algo deals from Perion''s existing ((non--Greenbids)) customers,, unlocking over one million dollars in booked business within the first 33 months post acquisition
• Launch of Performance CTV Solution to capture share in \$\$3366B++ high--growth streaming ad market³
• Expanding into Korea through strategic partnerships with KT Corporation and NHN AD,, unlocking access to APAC's high--growth \$\$2211B DOOH market
• Expanding EMEA DOOH reach and growth through strategic partnerships in Europe
• Anat Paran joins Perion as the new Chief Operating Officer,, bringing a wealth of operational and organizational leadership
• Second quarter share repurchase of 33..66 million shares for the amount of \$\$3333..44 million
• Reiterating FY 22002255 guidance

"Our second quarter financial performance reflects our progress and early validation of our Perion One strategy,, marked by first quarter of year--over--year growth in Advertising Solutions revenue since the third quarter of 22002233,, signaling that we are beginning to reap the fruits of our transformation,," said Tal Jacobson,, Perion's CEO..

²² Retail Media revenue includes several media channels,, such as CTV,, DOOH,, and others

³³ 22002266 forecast for Connected TV ad spending in the U..S.. according to eMarketer ((July 22002255))

"As our financial performance continues to improve,, we are also making significant progress in executing our business strategy.. The integration of Greenbids into Perion is fully on track,, and we are already benefiting from tangible synergies,, reflected in early wins of custom algorithm deals from existing and new customers,," added Mr.. Jacobson.. "Further expanding our Perion One platform offering,, earlier today we announced the launch of our new performance CTV solution,, enabling us to activate outcome--based video campaigns across premium streaming environments,, with enhanced creative formats and advanced attribution.. As CTV ad spend continues to shift toward performance--driven models,, we believe this offering significantly strengthens our value proposition.."

"At the same time,, our expansion into Korea,, alongside new partnerships across Europe,, marks another strong step in Perion's global growth strategy,," Mr.. Jacobson continued.. "It reflects the trust leading companies place in our technology and the strength of our partnerships as we scale across both new and existing markets.. "

Revenue and Trends by channel⁴

	Q22 22002255
Channels	Revenue ((\$\$M))	%% of Revenue	YoY Change
DOOH	117766	1177%%	3355%%
CTV	9977	99%%	--55%%
Web	553311	5522%%	55%%
Search	222244	2222%%	--3355%%
Other	0033	00%%	--5511%%

66 Numbers may not add up due to rounding

Financial Outlook for Full--Year 22002255⁵

Based on current expectations,, the Company is reiterating its full--year 22002255 outlook ranges::

• Revenue of \$\$443300 to \$\$445500 million
• Adjusted EBITDA⁶⁶ of \$\$4444 to \$\$4466 million
• Adjusted EBITDA⁶⁶ to contribution ex--TAC⁶⁶ of 2222%% at the midpoint

Mr.. Jacobson concluded:: "While 22002255 is a year of transition and transformation for Perion,, our financial and business performance represent another meaningful step forward in our journey to cement Perion as a one --stop solution for brands,, agencies,, and retailers,, and become the platform of choice for CMOs seeking transparency,, efficiency,, and measurable performance across digital channels.."

Share Repurchase Program

• In March 22002255,, Perion's Board of Directors authorized a \$\$5500 million expansion of the previously authorized share repurchase program of \$\$7755 million of its outstanding shares,, to a total of \$\$112255 million
• During the second quarter of 22002255,, the company repurchased a total of 33..66 million shares at a total amount of \$\$3333..44 million..
• As of June 3300,, 22002255,, the company repurchased a total of 99..66 million shares at a total amount of \$\$8866..77 million..

66 Adjusted EBITDA and Contribution ex--TAC are non--GAAP measures.. See below reconciliation of GAAP to non--GAAP measures..

⁵⁵ We have not provided an outlook for GAAP Income from operations or reconciliation of Adjusted EBITDA guidance to GAAP Income from operations,, the closest corresponding GAAP measure,, because we do not provide guidance for certain of the reconciling items on a consistent basis due to the variability and complexity of these items,, including but not limited to the measures and effects of our stock--based compensation expenses directly impacted by unpredictable fluctuation in our share price and amortization in connection with future acquisitions.. Hence,, we are unable to quantify these amounts without unreasonable efforts..

Financial Comparison for the Second Quarter of 22002255

Revenue:: Revenue decreased by 55%% to \$\$110033..00 million in the second quarter of 22002255 from \$\$110088..77 million in the second quarter of 22002244.. Advertising Solutions revenue increased 88%% year--over--year,, accounting for 7788%% of revenue,, primarily due to a 3355%% increase in Digital Out of Home revenue and a 55%% increase in our Web channel,, partially offset by 55%% decline in CTV revenue.. Search Advertising revenue decreased by 3355%% year--over--year,, accounting for 2222%% of revenue,, following the previously announced changes implemented by Microsoft Bing in 22002244..

Traffic Acquisition Costs and Media Buy (( "TAC")):: TAC amounted to \$\$5555..44 million,, or 5544%% of revenue,, in the second quarter of 22002255,, compared with \$\$5588..99 million,, or 5544%% of revenue,, in the second quarter of 22002244..

GAAP Net Income ((Loss)):: GAAP net loss decreased by 4444%% to a loss of \$\$33..55 million in the second quarter of 22002255,, compared with a GAAP net loss of \$\$66..22 million in the second quarter of 22002244..

Non--GAAP Net Income:: Non--GAAP net income was \$\$1122..00 million,, or 1122%% of revenue,, in the second quarter of 22002255,, compared with \$\$1133..44 million,, or 1122%% of revenue,, in the second quarter of 22002244.. A reconciliation of GAAP to non--GAAP net income is included in this press release..

Adjusted EBITDA:: Adjusted EBITDA was \$\$77..11 million,, or 77%% of revenue ((and 1155%% of Contribution ex--TAC)) in the second quarter of 22002255,, compared with \$\$77..77 million,, or 77%% of revenue ((and 1155%% of Contribution ex--TAC)) in the second quarter of 22002244.. A reconciliation of GAAP income from operations to Adjusted EBITDA is included in this press release..

Cash Flow from Operations :: Net cash from operating activities in the second quarter of 22002255 was \$\$2211..33 million,, compared with \$\$2200..55 million that were used in the second quarter of 22002244.. Operating cash flow includes approximately \$\$88 million in customer collection that shifted from March 22002255 to April 22002255..

Net cash:: As of June 3300,, 22002255,, cash and cash equivalents,, short--term bank deposits and marketable securities,, amounted to \$\$331188..55 million,, compared with \$\$337733..33 million as of December 3311,, 22002244..

Conference Call

Perion's management will host a conference call to discuss the results at 88::3300 a..m.. ET today:: Registration link:: https::////perion--q22--22002255--earnings--call..open--exchange..net// A replay of the call and a transcript will be available within approximately 2244 hours of the live event on Perion's website..

About Perion Network Ltd..

Perion helps brands,, agencies,, and retailers maximize the value of their advertising investments with advanced AI and creative technologies.. Its unified platform,, Perion One,, bridges media,, data,, and performance across digital channels to deliver superior results in an increasingly complex advertising environment..

For more information,, visit www..perion..com

Non--GAAP Measures

Non--GAAP financial measures consist of GAAP financial measures adjusted to exclude certain items.. This press release includes certain non --GAAP measures,, including Contribution ex --TAC and Adjusted EBITDA..

Contribution ex--TAC presents revenue reduced by traffic acquisition costs and media buy,, reflecting a portion of our revenue that must be directly passed to publishers or advertisers and presents our revenue excluding such items.. We believe Contribution ex --TAC is a useful measure in assessing the performance of the Company because it facilitates a consistent comparison against our core business without considering the impact of traffic acquisition costs and media buy related to revenue reported on a gross basis..

Adjusted Earnings Before Interest,, Taxes,, Depreciation and Amortization (( "Adjusted EBITDA ")) is defined as income from operations excluding stock --based compensation expenses,, restructuring costs,, unusual legal costs,, depreciation,, amortization of acquired intangible assets,, retention and other acquisition --related expenses,, as well as gains and losses recognized with respect to changes in fair value of contingent consideration..

Adjusted free cash flow is defined as net cash provided by ((or used in)) operating activities less cash used for the purchase of property and equipment,, but excluding the purchase of property and equipment related to our new corporate headquarter office and the portion of the cash payment of contingent consideration in excess of the acquisition date fair value,, as we do not view either of those expenses as reflective of our normal on--going expenses.. It is important to note that these expenses are in fact cash expenditures..

Non--GAAP net income and non--GAAP diluted earnings per share are defined as net income ((loss)) and net earnings ((loss)) per share excluding stock--based compensation expenses,, restructuring costs,, unusual legal costs,, retention and other acquisition --related expenses,, amortization of acquired intangible assets and the related taxes thereon,, foreign exchange gains and losses associated with ASC--884422,, as well as gains and losses recognized with respect to changes in fair value of contingent consideration..

The purpose of such adjustments is to give an indication of our performance exclusive of non --cash charges and other items that are considered by management to be outside of our core operating results.. These non--GAAP measures are among the primary factors management uses in planning for and forecasting future periods.. Furthermore,, the non--GAAP measures are regularly used internally to understand,, manage and evaluate our business and make operating decisions,, and we believe that they are useful to investors as a consistent and comparable measure of the ongoing performance of our business.. However,, our non--GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.. Additionally,, these non --GAAP financial measures may differ materially from the non -- GAAP financial measures used by other companies.. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these projected measures,, together with some of the excluded information not being ascertainable or accessible,, we are unable to quantify certain amounts that would be required for such presentation without unreasonable effort.. Consequently,, no reconciliation of the forward--looking non--GAAP financial measures is included in this press release.. A reconciliation between results on a GAAP and non--GAAP basis is provided in the last table of this press release..

Forward Looking Statements

This press release contains historical information and forward--looking statements within the meaning of the Securities Act of 11993333,, as amended,, the Securities Exchange Act of 11993344,, as amended,, and the safe-- harbor provisions of the Private Securities Litigation Reform Act of 11999955 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.. All statements other than statements of historical fact included in this press release are forward--looking statements.. 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,, political,, economic and other developments ((including the current war between Israel and Hamas and other armed groups in the region)),, 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,, and general risks associated with the business of Perion including,, the transformation in our strategy,, intended to unify our business units under the Perion brand ((Perion One)),, intense and frequent changes in the markets in which the businesses operate and in general economic and business conditions ((including the fluctuation of our share price)),, loss of key customers or of other partners that are material to our business,, the outcome of any pending or future proceedings against Perion,, data breaches,, cyber--attacks and other similar incidents,, unpredictable sales cycles,, competitive pressures,, market acceptance of new products and of the Perion One strategy,, changes in applicable laws and regulations as well as industry self --regulation,, negative or unexpected tax consequences,, inability to meet efficiency and cost reduction objectives,, changes in business strategy and various other factors,, whether referenced or not referenced in this press release.. We urge you to consider those factors,, together with the other risks and uncertainties described in our most recent Annual Report on Form 2200--F for the year ended December 3311,, 22002244 as filed with the Securities and Exchange Commission ((SEC)) on March 2255,, 22002255,, and our other reports filed with the SEC,, in evaluating our forward--looking statements and other risks and uncertainties that may affect Perion and its results of operations.. Perion does not assume any obligation to update these forward--looking statements..

Contact Information:: Perion Network Ltd.. Dudi Musler,, VP of Investor Relations ++997722 ((5544)) 77887766778855 dudim@perion..com

CONSOLIDATED STATEMENTS OF OPERATIONS

In thousands ((except share and per share data))

			Three months ended June 3300,,		Six months ended June 3300,,
		22002255		22002255	22002244
		((Unaudited))	22002244 ((Unaudited))	((Unaudited))	((Unaudited))
Revenue
Advertising Solutions	\$\$	8800,,557711	\$\$ 7744,,337744	\$\$ 115500,,227766	\$\$ 115500,,116600
Search Advertising		2222,,441100	3344,,331177	4422,,004477	111166,,335511
Total Revenue		110022,,998811	110088,,669911	119922,,332233	226666,,551111
Costs and Expenses
Cost of revenue		1133,,003377	1111,,229999	2255,,337788	2222,,778844
Traffic acquisition costs and media buy		5555,,337722	5588,,993333	110055,,005533	115566,,555522
Research and development		88,,994455	1100,,111122	1177,,339977	1199,,992233
Selling and marketing		1199,,552299	1188,,004444	3377,,225544	3344,,113344
General and administrative		99,,117700	1100,,000033	1188,,554466	1199,,775555
Change in fair value of contingent consideration		--	11,,554411	--	11,,554411
Depreciation and amortization		44,,229944	44,,777733	77,,776666	99,,333311
Restructuring costs and other charges		--	66,,889955	11,,332222	66,,889955
Total Costs and Expenses		111100,,334477	112211,,660000	221122,,771166	227700,,991155
Loss from Operations		((77,,336666))	((1122,,990099))	((2200,,339933 ))	((44,,440044))
Financial income,, net		33,,558833	55,,770033	66,,999900	1111,,118899
Income ((loss)) before Taxes on income		((33,,778833))	((77,,220066))	((1133,,440033))	66,,778855
Taxes on income ((tax benefit))		((331122))	((999977))	((11,,558866))	11,,222266
Net Income ((loss))	\$\$	((33,,447711))	\$\$ ((66,,220099))	\$\$ ((1111,,881177))	\$\$ 55,,555599
Net Earnings ((loss)) per Share
Basic	\$\$	((000088))	\$\$ ((001133))	\$\$ ((002277))	\$\$ 001122
Diluted	\$\$	((000088))	\$\$ ((001133))	\$\$ ((002277))	\$\$ 001111
Weighted average number of shares
Basic		4422,,003322,,885566	4488,,773333,,554400	4433,,444422,,006622	4488,,226688,,778866
Diluted		4422,,003322,,885566	4488,,773333,,554400	4433,,444422,,006622	4499,,336644,,775555
	88

CONDENSED CONSOLIDATED BALANCE SHEETS

In thousands

	June 3300,, 22002255	December 3311,, 22002244
	((Unaudited))	((Audited))
ASSETS
Current Assets
Cash and cash equivalents	\$\$ 111133,,664433	\$\$ 115566,,222288
Restricted cash	11,,115555	11,,113344
Short --term bank deposits	114455,,662211	113399,,333333
Marketable securities	5599,,771155	7777,,777744
Accounts receivable,, net	116622,,887755	116644,,335588
Prepaid expenses and other current assets	3300,,992299	2222,,663388
Total Current Assets	551133,,993388	556611,,446655
--Term Assets Long
Property and equipment,, net	1100,,227777	88,,991166
Operating lease right--of--use assets	1188,,550000	2200,,220099
Goodwill and intangible assets,, net	336633,,885599	331166,,000033
Deferred taxes		-- 88,,551177
Other assets	661100	441166
--Term Assets Total Long	339933,,224466	335544,,006611
Total Assets	\$\$ 990077,,118844	\$\$ 991155,,552266
LIABILITIES AND SHAREHOLDERS'' EQUITY
Current Liabilities
Accounts payable	\$\$ 111199,,667700	\$\$ 112222,,000055
Accrued expenses and other liabilities	3333,,993388	3322,,884488
Short --term operating lease liability	33,,221111	33,,664488
Deferred revenue	11,,881155	22,,004499
Short --term payment obligation related to acquisitions	33,,220033	11,,330000
Total Current Liabilities	116611,,883377	116611,,885500
Long --Term Liabilities
Payment obligation related to acquisition	1199,,555533	--
Long --term operating lease liability	1199,,776655	1188,,665544
Deferred taxes	55,,009966	--
Other long --term liabilities	1122,,667722	1122,,008822
--Term Liabilities Total Long	5577,,008866	3300,,773366
Total Liabilities	221188,,992233	119922,,558866
Shareholders'' equity
Ordinary shares	336600	339911
Additional paid --in capital	550022,,553399	552277,,114499
Treasury shares at cost	((11,,000022	)) ((11,,000022 ))
Accumulated other comprehensive gain ((loss))	11,,556644	((221155 ))
Retained earnings	118844,,880000	119966,,661177
Total Shareholders'' Equity	668888,,226611	772222,,994400
Total Liabilities and Shareholders'' Equity	\$\$ 990077,,118844	\$\$ 991155,,552266

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

In thousands

	Three months ended June 3300,,					Six months ended June 3300,,
	22002255			22002244		22002255		22002244
		((Unaudited))		((Unaudited))		((Unaudited))		((Unaudited))
Cash flows from operating activities
Net Income ((loss))	\$\$	((33,,447711))	\$\$	((66,,220099))	\$\$	((1111,,881177))	\$\$	55,,555599
Adjustments required to reconcile net income to net cash provided by operating activities::
Depreciation and amortization		44,,229944		44,,777733		77,,776666		99,,333311
Stock--based compensation expense		77,,449944		55,,668866		1155,,008811		1111,,110055
Foreign currency translation		((7777))		77		((6677))		2299
Accrued interest,, net		((11,,221166))		11,,004433		11,,669988		22,,778811
Deferred taxes,, net		22,,112288		((11,,440033))		55,,444477		((11,,883355))
Accrued severance pay,, net		115511		((224466))		((884477))		((440044))
Restructuring costs		--		66,,889955		11,,332222		66,,889955
Gain from sale of property and equipment		((1122))		--		((3377))		((88))
Net changes in operating assets and liabilities		1122,,000011		((3311,,008800))		((44,,330055))		((4477,,009911))
Net cash provided ((used in)) by operating activities	\$\$	2211,,229922	\$\$	((2200,,553344))	\$\$	1144,,224411	\$\$	((1133,,663388))
Cash flows from investing activities
Purchases of property and equipment,, net of sales		((11,,007744))		((669922))		((22,,777711))		((11,,113311))
Capitalization of development costs		((441133))		--		((441133))		--
Investment in marketable securities,, net of sales		66,,992222		33,,664444		1188,,449933		11,,770099
Short--term deposits,, net		((44,,330055))		4400,,440011		((66,,228888))		2222,,771122
Cash paid in connection with acquisitions,, net of cash acquired		((2266,,556666))		--		((2266,,556666))		--
Net cash provided by ((used in)) investing activities	\$\$	((2255,,443366))	\$\$	4433,,335533	\$\$	((1177,,554455))	\$\$	2233,,229900
Cash flows from financing activities
Proceeds from exercise of stock--based compensation		1199		110077		3366		336666
Payments of contingent consideration		--		((3311,,770022))		--		((3311,,770022))
Purchase of treasury stock		((3333,,225577))		((2200,,005522))		((3399,,775588))		((2200,,005522))
Net cash used in financing activities	\$\$	((3333,,223388))	\$\$	((5511,,664477))	\$\$	((3399,,772222))	\$\$	((5511,,338888))
Effect of exchange rate changes on cash and cash equivalents and restricted cash		331188		((3355))		446622		((111133))
Net decrease in cash and cash equivalents and restricted cash		((3377,,006644))		((2288,,886633))		((4422,,556644))		((4411,,884499))
Cash and cash equivalents and restricted cash at beginning of period		115511,,886622		117755,,996622		115577,,336622		118888,,994488
Cash and cash equivalents and restricted cash at end of period	\$\$	111144,,779988	\$\$	114477,,009999	\$\$	111144,,779988	\$\$	114477,,009999

RECONCILIATION OF GAAP TO NON--GAAP RESULTS

In thousands ((except share and per share data))

	Three months ended June 3300,,				Six months ended June 3300,,
	22002255		22002244		22002255		22002244
							226666,,551111
	5555,,337722		5588,,993333		110055,,005533		115566,,555522
\$\$	4477,,660099	\$\$	4499,,775588	\$\$	8877,,227700	\$\$	110099,,995599
	Three months ended			Six months ended
							22002244
\$\$	((77,,336666))	\$\$	((1122,,990099))	\$\$	((2200,,339933))	\$\$	((44,,440044))
	77,,449944		55,,668866		1155,,008811		1111,,110055
	22,,445522		11,,771133		44,,333300		33,,550099
	119900		--		775544		--
	--		11,,554411		--		11,,554411
	33,,771166		44,,225599		66,,663300		88,,334455
	--		66,,889955		11,,332222		66,,889955
	557788		551144		11,,113366		998866
\$\$	77,,006644	\$\$	77,,669999	\$\$	88,,886600	\$\$	2277,,997777
	\$\$	110022,,998811 22002255	((Unaudited)) \$\$ June 3300,, ((Unaudited))	110088,,669911 22002244	\$\$	119922,,332233 22002255	((Unaudited)) \$\$ June 3300,, ((Unaudited))

RECONCILIATION OF GAAP TO NON--GAAP RESULTS

In thousands ((except share and per share data))

		Three months ended June 3300,,				Six months ended June 3300,,
		22002255		22002244	22002255		22002244
		((Unaudited))				((Unaudited))
GAAP Net Income ((loss))	\$\$	((33,,447711))	\$\$	((66,,220099))	\$\$	((1111,,881177))	\$\$	55,,555599
Stock--based compensation expenses		77,,449944		55,,668866		1155,,008811		1111,,110055
Amortization of acquired intangible assets		33,,771166		44,,225599		66,,663300		88,,334455
Retention and other acquisition related expenses		22,,445522		11,,771133		44,,333300		33,,550099
Unusual legal costs		119900		--		775544		--
Change in fair value of contingent consideration		--		11,,554411		--		11,,554411
Restructuring costs		--		66,,889955		11,,332222		66,,889955
Foreign exchange losses ((gains)) associated with ASC--884422		11,,995511		((115555))		11,,559911		((116655))
Taxes on the above items		((336688))		((330033))		((555566))		((880011))
Non--GAAP Net Income	\$\$	1111,,996644	\$\$	1133,,442277	\$\$	1177,,333355	\$\$	3355,,998888
Non--GAAP diluted earnings per share	\$\$	002266	\$\$	002266	\$\$	003366	\$\$	007711
Shares used in computing non--GAAP diluted earnings per share	1122	4466,,551133,,998855		5511,,221155,,665522		4477,,559944,,773344		5500,,887766,,448877

RECONCILIATION OF GAAP TO NON--GAAP RESULTS

In thousands ((except share and per share data))

	Three months ended June 3300,,				Six months ended June 3300,,
	22002255		22002244		22002255		22002244
		((Unaudited))				((Unaudited))
Net cash provided ((used in)) by operating activities	\$\$	2211,,229922	\$\$	((2200,,553344))	\$\$	1144,,224411	\$\$	((1133,,663388))
Purchases of property and equipment,, net of sales		((11,,448877))		((669922))		((33,,118844))		((11,,113311))
Free cash flow	\$\$	1199,,880055	\$\$	((2211,,222266))	\$\$	1111,,005577	\$\$	((1144,,776699))
Purchase of property and equipment related to our new corporate headquarter office		994422		118811		22,,227799		118811
Portion of the cash payment of contingent consideration in excess of the acquisition date fair
value		--		99,,664422		--		99,,664422
Adjusted free cash flow	\$\$	2200,,774477	\$\$	((1111,,440033))	\$\$	1133,,333366	\$\$	((44,,994466))
1133