1

ANALYST DAY

DECEMBER 31, 2015

This presentation 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” 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, among others, 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, unpredictable sales cycles, competitive pressures, market acceptance of new products, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, whether referenced or not referenced in this presentation . Various other risks and uncertainties may affect Perion and its results of operations, as described in reports filed by the Company with the Securities and Exchange Commission from time to time, including its annual report on Form 20-F for the year ended December 31, 2014 filed with the SEC on April 16, 2015. Perion does not assume any obligation to update these forward-looking statements..

FORWARD LOOKING STATEMENTS

Non-GAAP financial measures, including adjusted EBITDA, consist of GAAP financial measures adjusted to exclude acquisition related expenses, other non-recurring expenses, share-based compensation expenses, accretion and gain from the reversal of acquisition related contingent consideration, impairment of goodwill, amortization and impairment of acquired intangible assets and the related taxes thereon, as well as certain accounting entries under the business combination accounting rules that require us to recognize a legal performance obligation related to revenue arrangements of an acquired entity based on its fair value at the date of acquisition. 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.

NON-GAAP MEASURES

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EXECUTIVE SUMMARY

US MARKET OPPORTUNITY

Offline Media Spend Online Media Spend

Direct Response$20B 16%

Brand$18B 42%

Brand$108B 84%

$128B $43B

Direct Response$25B 58%

US DIGITAL AD SPEND FOR BRAND

$14.8

$17.7

$21.2

$24.6

$28.0

$31.1

2012 2013 2014 2015 2016 2017

Brand 40% 42% 44% 46% 48% 50%

DR 60% 58% 56% 54% 52% 50%

Source: Kantar Media Intelligence, eMarketer

BRANDS ARE CLOSING

THE DIGITAL SPEND GAP

4

01

5

RICH MEDIA AD SPENDINGUNITED STATES, 2014-2018

VIDEO AD SPENDINGUNITED STATES, 2014-2018

Source: eMarketer, 2015 Source: eMarketer, 2015

02SPENDING ON BRAND-ORIENTED

FORMATS WILL NEARLY DOUBLE BY 2018

AND MOBILE AND PROGRAMMATIC

AD SPEND ARE GROWING AS WELL

US DISPLAY AD SPENDING SHARE, BY TYPE, 2011-2017 % OF TOTAL

Note: read as 28% of display-related spending was through RTB in 2013; numbers may not add up to 100% due to rounding. Source: MAGNA GLOBAL and eMarketer

03

$19.2

$30.5

$42.1

$50.8

$59.8

$0.00

$15.00

$30.00

$45.00

$60.00

$75.00

2014 2015 2016 2017 2018

MOBILE AD SPEND (BILLIONS) 2014-2017

6

7

Sharp rise in ad-block usage, particularly among males and younger demos –primarily on desktop

Mobile ad blocking still unfolding; iOS 9 built in ad blocking capability, still not set as a default

SOURCE: PAGEFAIR AND ADOBE

HOWEVER, AD BLOCKING IS ALSO GROWING AS CONSUMERS

ARE FED UP WITH POOR DIGITAL AD EXPERIENCES04

Travel Finance Local Lifestyle Business News Sports Ent. Adult Comics Tech Games

5% 10% 10% 10% 15% 15% 20% 20% 20% 25% 25% 30%

AD-BLOCK USAGE RATES, BY VERTICAL (GLOBAL)

DESKTOP AD-BLOCKER USERS (GLOBAL)

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OUR STRATEGY TAKES INTO ACCOUNT

THESE TRENDS…

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DELIVER HIGH-QUALITY, ENGAGING AND DATA-DRIVEN AD SOLUTIONS TO BRANDS AND PUBLISHERS.

10

HIGH-QUALITY AS

A DIFFERENTIATOR

1. Providing premium publishers

with high-impact ad formats

and search results

2. Engaging creative that delivers

superior results for brands

3. Dynamic data-driven technology

on social, mobile platforms

4. A commitment to outstanding

execution and service

5. Exclusive inventory

and branded search

% of brands/agencies that

agreed the following items are

important to high-quality

PREMIUM AD

PLACEMENT/

POSITION

VARIETY OF

DIGITAL

FORMATS

SCALABLE FORMATS

ACROSS MULTIPLE

PARTNERS

74% 71% 59%

Source: Independent Online Study; 1,193 Total Respondents (June 2015)

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HIGH-QUALITY IS A LARGE

AND OWNABLE MARKET

MOBILE AD SPEND INCREASING FROM 42% IN 2015 TO 66% OF TOTAL AD SPEND IN 2018

NATIVE, HIGH-IMPACT, VIDEO CATEGORIES GROWING AT >30%

Global digital advertising spend

$255B

Growing from $72B in 2015

Growing from $170B in 2015

Source: eMarketer, 2018 Projections

Mobile ad spend

$169B

High-quality total addressable market

$13B

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THE COMBINATION WITH

UNDERTONE ESTABLISHES

PERION AS THE MARKET

LEADER HIGH-IMPACT FORMATS

BRAND & AGENCY RELATIONSHIPS

CREATIVE INNOVATION

PROGRAMMATIC DIRECT

TECHNOLOGY

SOCIAL & MOBILE

MARKETING PLATFORM

MOBILE ENGAGEMENT

PLATFORM

DATA DRIVEN ANALYTICS

SOFTWARE PUBLISHER

MONETIZATION SOLUTIONS

CONTENT PUBLISHER

MONETIZATIONFORMATS

OUR THREE MAIN AREAS OF

FOCUS FOR 2016 ARE:

• Innovate and launch new cross screen high-impact ad formats

• Scale mobile/social acquisition platform with programmatic and fully managed options

• Launch programmatic high-impact private marketplace

• Invest in real-time dynamic creative optimization

1. New Formats

2. Engagement

3. Programmatic

• Continue to expand search based ad formats beyond downloads

• Grow engagement and optimization platform for content publishers cross device

• Develop/acquire non-traditional programmatic ad platform for content publishers

• Launch high-impact creative publishing platform

Build out unique first party data set to solidify differentiation13

PUBLISHERS ADVERTISERS

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15

SEARCH REPRESENTS 50% OF TOTAL DIGITAL AD SPENDING -

AND GROWING

$82B $121B

2015 2018

OUR SEARCH

BUSINESS HAS

STABILIZED…

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REVENUE HAS STABILIZED

-

20.0

40.0

60.0

80.0

100.0

120.0

Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15

Search monetization revenue ($M)

• New rev-share model provides more certainty and visibility

• Turnaround in Q3.15: sequential growth for the first time in six

quarters

• Double digit profitability

$129.2M revenue

… HOWEVER THE

INDUSTRY IS

STILL VOLATILE

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NO PLACE FOR SMALL PLAYERS:

• Downloadable software market is shrinking,

leaving room only for big players such as Perion

• Perion has already proven its ability to execute

in this changing environment

• Additional policies and new changes in the

ecosystem:• Windows 10

• Chrome

• Ad blockers

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OPPORTUNITIES FOR 2016: LEVERAGING OUR ASSETS

OPPORTUNITIES

1. Expanding our offering to new audiences

2. Expanding our offering to mobile

3. Enhancing our offering: new opportunities rising from Bing partnership (API feed, native ads)

1. Long term contract with Bing (until 2018) with very advantageous commercial terms

2. Proprietary technology

3. Publishers centric skill set

ASSETS

OUR NEW

TARGET

AUDIENCE:

CONTENT

PUBLISHERS

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Premium content publishers covering:

USA | UK | Australia | France | Germany

Vertical markets including:

News & Media Art & entertaining

Health & LifeStyle

NONE OF THEM KNOWS HOW TO BALANCE THE NEED FOR

ENGAGEMENT AND MONETIZATION

• No connection between engagement & monetization tools

• No centralized view or use of data

• Optimizing single ad slots and not revenue per page/site

Market is flooded with single point tools, with very little connection, if any, between them

ANALYTICS, OPTIMIZATION, DATA, ETC.

Point

Solutions

ENGAGEMENTMONETIZATION

E

M

M

M

M

20

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AND PUBLISHERS DON'T HAVE THE CAPACITY

TO LOOK BEYOND IMMEDIATE THREATS

• Majority of Publishers are still

focused on developing an adequate

digital/mobile solution as they are in

the war for survival

• Very few have been able to dedicate

sufficient resources to develop a

longer term strategy, or to tackle the

“next level” of challenges

Most Publisher are still struggling

with the “basics”

Most trending topics are all

immediate threats…

Ad Fraud

Ad Blockers

Viewability

Expanding file sizes of ads

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WHICH ARE BEING ADDRESSED WITH

TOO MANY SINGLE POINT SOLUTIONS

Findings of CodeFuel’s research:

• On 125 sites reviewed, 375 unique vendors were identified

• Outside Google, Facebook & AppNexus, very few vendors

are commonly used

• Connections per site range between 20 to 100+

• Majority of vendors offer a single point solution

• Leading categories by number of connection per site:

Analytics (92 vendors), Networks (39 vendors), DSPs (46

vendors), Engagement (22 vendors)

Leading categories by % used by Publishers

99%

95%

87%

85%

85%

78%

77%

74%

64%

57%

54%

45%

45%

28%

20%

20%

12%

2%

Analytics

Network

DSP

Targeting

Engagement

Other

DMP

Exchange

Security

SSP

Platform

Content mkt.

Video

affiliate mkt

Optimization

Link

Network - Native

in-image advertising

# Avg. Connections

With no clear standard in the

market, point solutions vary

dramatically among publishers

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=

Allow Publishers To Focus On What They

Do Best By Building Engagement &

Monetization Solutions Not ToolsTools = require extensive additional efforts by PublisherSolution = require limited efforts by Publisher

OUR VALUE PROPOSITION: MAKE THE

PUBLISHER'S LIFE SIMPLER

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OUR SOLUTION

25

OUR SOLUTION

26

27

DESKTOP IN-TAG

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EXPANDING

TO MOBILE:

MOBILE WEB

SOLUTION

DiscoveryPresent integrated content and monetization units pre-search.

SearchDeliver content and targeted ads alongside relevant search results.

Expanded ResultsExperience multiple ad formats, enhanced user experience.

For Demonstration Only

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=

1. Stabilizing legacy business

2. New growth opportunities leveraging

our existing assets

SUMMARY

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Source: Forrester Research, "The State of Consumers and Technology Benchmark 2014 US" as

cited in company blog, Jan 16, 2015 184904

CAPTURING CONSUMER ATTENTION IS DIFFICULT

HOW WE DO IT

HIGH-QUALITY

INVENTORY

INNOVATION

+TECHNOLOGY

STUNNING

CREATIVE &

HIGH-IMPACT

FORMATS

33

Auto CPG Fin Services Pharmaceutical Retail Tech/Telecom

WHO WE DO IT FOR

WHAT WE DO:FULL SERVICE DELIVERY & SUPPORT

CREATIVETurns creative

vision into digital reality through ideation, design and build of high

impact units

MEDIA

PLANNINGFinds a solution

that works best for brand’s specific

campaign objectives

CLIENT

SERVICESWorks with client

from start to finish, ensuring creative is

built, tags are launched, results

are analyzed

INVENTORY

MANAGEMENTMaintains quality of our publishers

inventory, ensuring brands are always

displayed in premium, safe environments

PERFORMANCEPerforms deep

analysis to strategically optimize for

optimal performance

throughout the campaign

STANDOUT CREATIVE FORMATS

DRIVE BETTER RESULTS

124%greater

unaided recall

more likely to be

shared on social

networks

higher overall

likeability

more likely to elicit

personal

recommendations

61%

40%

58%

Source: Ipsos ISI/Undertone High-impact Study (2014

Results)

4.29% Average CTR

PAGEGRABBER X™

PAGEGRABBER X™ is an immersive, highly

engaging, full-page takeover. Built with

responsive design, this unit ensures a

seamless and scalable experience across

devices.

Our proprietary full-screen, inherently viewable creative

2.1% Average Interaction Rate

SCREENSHIFT™Our proprietary full-screen, push down unit

SCREENSHIFT® is the industry’s

first high impact format built using

responsive design. Full-browser

width, pushes down publisher

content and contains leave-

behind to re-engage with.

tilt draw twist shake

32%

Avg Engagement Rate

UMOTION ADS™

UMOTION™ is our latest mobile

takeover ad unit that leverages

native smartphone capabilities,

allowing for a unique, participatory

ad experience.

14+ Avg Seconds Time Spent

1.8% Avg Interaction Rate

32%

TAPESTRY®

TAPESTRY is our new storytelling format

that enables a unique brand narrative using

playful mashups of static images and

animated GIFs. This format takes advantage

of the consumer’s natural behavior to see

what’s next; user controls the pace of the

story by tapping to proceed.

LAUNCH

PARTNER

PREMIUM PUBLISHERSDelivering high impact ads with publishers takes a lot of time and effort; Undertone enables standout brand experiences at scale – over 1 billion monthly impressions

BETTER INVENTORYOur relationships with media partners provide access to their best inventory: unique formats and large-canvas units

TAILORED SITE LISTSPublishers or categories based on specific campaign needs

THE GREEN LIST™

HIGH-QUALITY INVENTORY

SUPERIOR INNOVATION

& TECHNOLOGY

FUTURE

PROOF LABS

Exploring the Future

of Digital

Advertising

PIXL

STUDIOS

Creating Standout

Brand Experiences

VIRTUOSO

Enabling High-Impact

Buying Programmatically

Mobile First

Rich Media

Publishing

Platform

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44

THE MOBILE MARKETING

UNIVERSE IS CROWDED

• It’s difficult to determine the best traffic sources, understand your performance, and optimize ad campaigns effectively.

• Cost of acquiring users increased 60% last year making ROI difficult.

• You invest time and money to drive installs, only to have 70% of users churning in less than 3 months post-install.

ACQUIRING & ENGAGING

MOBILE USERS IS CHALLENGING

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Our Unique

Solution

keep ‘emuser engagement

Easy and scalable connectivity to large number of traffic sources enabling better ROI optimization

get ‘emuser acquisition

Easy creation and management of mobile CRM campaigns with smart engagement tools increasing user value

We organize the universe of mobile marketing.

WITH UNMATCHED FLEXIBILITY

ON A SINGLE PLATFORM

46

self-serve

the first do-it-yourself, cross-network mobile advertising platform in the industry

fully-managed

rely on our expert account team to manage and optimize your campaigns for you

or

get ‘em

user acquisition

47

The challenge with acquiring users…

• centralized media buying and campaign management

• flexible reach

• unified reporting

• streamlined optimization

• sophisticated retargeting

…is solved with our platform

DEMO

keep ‘em

user engagement

50

ENGAGING MOBILE USERS

IS CHALLENGING

marketers invest time and

money to drive installs, only to

have your users quickly churn

out of their app

OUR PLATFORM SOLVES

THIS CHALLENGE

It is designed to efficiently increase user value by allowing the marketer to do all of the above quickly

But don’t take our word for it – ask our clients…

…and partners

and many more…

CUSTOMER TESTIMONIALS

“with growmobile, we've been able to scale our ad spends and provide a very strong ROI month over month.”

Tim Hsu,

User Acquisition

“we chose MakeMeReach because their software is among the most cutting-edge in the market. With MMR our KPI objectives were taken into account and we felt we had true business partners by our side.”

Jessica Delpirou,

Country Manager France

organic user growth;

i.e. virality, reviews

keep 'emuser engagement

get 'emuser acquisition

TOGETHER OUR PLATFORM IS UNMATCHED

highly-optimized acquisition

spend

successful user retargeting

reward-based acquisition

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FINANCIAL INFORMATION

UPDATING GUIDANCESTABILITY COUPLED WITH GROWTH

Q4’15 Guidance Prior: New:Revenue $52 - 54M $64-66M Adjusted EBITDA $6 - 7M $9.5-10.5M

$-

$10

$20

$30

$40

$50

$60

$70

Q1'15 Q2'15 Q3'15 Q4'15E

• 2015 expected revenues $217 – 219M

• 2015 expected adj EBITDA $52 – 53M

Addition of Undertone

From 85% search revenue to a more balanced breakdown:

REVENUE BREAKDOWN

NEWLY DIVERSIFIED REVENUES*

STRONG GROWTH TRAJECTORY

(2016E) Search Advertising Product

* EBITDA in 2016 reflects search business model transition and continued investment in Growmobile.

2

2(2015E)

Search Advertising Product

• 2016 EBITDA margin expected to be approximately 10-12%*

• Long-term EBITDA margins expected to be 15-18%

• 2016 revenue growth expected to be approximately 60%

• Long-term revenue growth expected to be 10-15%

REVENUE BREAKDOWN

69.4%

56.9%49.6%

37.5%

25.9%

18.1%33.1% 44.7%

58.2%70.8%

12.5% 10.1% 5.7% 4.3% 2.7%

Q3'14 Q4'14 Q1'15 Q2'15 Q3'15

SEARCH REVENUE BY PAYMENT MODEL, %

Old model Rev share Ads

UNDERTONE REVENUE BREAKDOWN, %

ADVERTISING

REVENUE

SEASONALITY

61

• The advertising business is highly seasonal

• Historically, the fourth quarter has been the strongest quarter

while Q1 is the weakest

Q4'14 Q1'15 Q2'15 Q3'15

YUMI UT SZMK TRMR RUBI

REVENUE RECOGNITIONGROSS NET REVENUE

• Gross/Net Revenue recognition basis:

o Inventory/Financial risk

o Substantial Product/Content contribution

• Revenue generating categories:o Search Gross - over 90% of current revenues with managed financial risk

Net - less than 10% of revenues without any financial risk

o Product Gross - sale of Proprietary product

o Advertising Gross - over 80% of current net sales High-Impact proprietary andstandard ad formats

Net - less than 20% of current net sales from standard display andmobile ad formats

REVENUE GROWTH & PROFIT PROFILE

• Perion's growth profile:

o Growmobile & Sitefuel fastest (triple digit) growth from a small (single digit) base

o Undertone high (double digit) growth from substantial (triple digit) base

o Download Monetization low (stable to single digit) growth from substantial (triple digit) base

• Perion's profit profile:

o Growmobile: Investment stage expected to draw down EBITDA, profitable 2017

o Undertone: High level of profitability, margin increasing with transition to high-impact formats

o Download Monetization: High profitability not sustainable with loss of tail, expected to stabilize as transition is

completed

BALANCED TRANSACTIONDiverse financing

• Periono LT Public Convertible Debt $37M - Profits sufficient to support debt and covenants

o ST Bank Leumi Credit Facility $20M - Leveraging Bluechip receivables

o JPMorgan Equity Financing $10M - Reinforces commitment by quality institutional investor

o Cash & equivalents >$50M

• Undertoneo Renewed 5 year debt by US bank consortium $50M

o UT profits sufficient to support debt and covenants

o Financing fixed working capital spread

8 countries

Global Presence in

TEL AVIV (HQ)

High-quality ad solutions:

a $13B opportunity

2015 Net Revenue

~$218M

Employees

675+

2015 EBITDA

~$52M

Number of Brand Advertisers & Publishers

1300+

2015 SUMMARY

HIGH-IMPACT

AD FORMATS

OUTSTANDING

EXECUTION

EXCLUSIVE

INVENTORY

DATA-DRIVEN

TECHNOLOGY

ENHANCED

ENGAGEMENT

BRANDED

SEARCH