What happened

Shares of Perion Network (PERI -3.47%) were flying higher today after the ad tech company announced preliminary first-quarter earnings, topping analyst estimates.

The stock closed Monday up 15.9% on the news.

A person looking at a glass screen with several TV images.

Image source: Getty Images.

So what

Perion, which provides an intelligent hub that connects ad buyers and sellers, said it expected first-quarter revenue to come in at $125 million, up 39% from the prior year and better than the analyst consensus at $119.1 million.

Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) also surged from $8.8 million in the quarter a year ago to $22 million, showing its strategy of focusing on the intelligent hub, a premium ad experience, and video monetization is paying off. Its EBITDA margin, excluding traffic acquisition costs, also rose from 25% to 42%, another sign that the intelligent hub is scaling well. The company also benefited from its acquisition last year of Vidazoo, a video content management platform, which gave a boost to revenue.

CEO Doron Gerstel said: "Perion is building an increasingly predictable and sustainable financial model, with our strong revenue ramp continuing into 2022 performance. Our results are driven by our strategic diversity of revenue streams, giving us the ability to deliver growth where the opportunities are."

Gerstel also credited the launch of the company's cookie-less technology, SORT, for the strong performance, and said the company will raise its guidance when it announces full first-quarter results on April 28.

Now what

Like other ad tech stocks, Perion soared in 2020 as the digital ad market boomed, but the stock has been relatively quiet in recent months even as it continues to blow past expectations. 

While some of its peers have seen slower growth as the digital ad boom rolls off, that doesn't seem to be the case with Perion. Even better, the stock looks undervalued, trading at less than 15 times 2022 run-rate EBITDA. For a company growing revenue by 39%, that looks like a bargain.