With that, I’ll turn the call over to Josef Mandelbaum, Chief Executive Officer. Josef, the call is yours…Josef Mandelbaum Thank you Brett and good morning everyone. Welcome to our second quarter earnings call. This morning, I’d like to focus my comments on a review of our record second quarter and first-half results, and to highlight some of our exciting initiatives for the remainder of the year. I will then turn the call over to Yacov, for more details regarding the financial results before opening up the call for questions. The second quarter was another great quarter for the company and the 26th consecutive quarter of growth on a year over year basis. After a lot of hard work and investment in our backend systems, as well as refining and optimizing our media buying capabilities, we seem to have hit an inflection point with our search business in the middle of the second quarter. We are very optimistic that this trend will continue in the second half of 2012 and beyond. Therefore, we are increasing our non-GAAP guidance for 2012 to the range of $50 - $52 million in revenue, and to $10.5 - $11.5 million in EBITDA. Non-GAAP Revenues in the second quarter increased by 53% year over year to $12.3 million dollars, primarily as a result of an increase in product and advertising revenues. Our product focused strategy enables us to continue to communicate with our users while increasing their life time value to Perion. Search revenue was up 15% compared to the previous quarter, as a result of steps taken to recapture the monetization of our existing users and better protect the monetization of our new users. In addition, we have significantly enhanced our ability to track our marketing efforts and rapidly adjust our programs to maximize their effectiveness. This in turn has dramatically improved the return on our investment.
We are pleased to report that, as a result of these efforts, June was a record revenue month for us and we see that trend continuing into the third and fourth quarters. As I have mentioned all along, building the proper fundamentals take time and discipline, but we have made significant progress over the last year, enabling us to scale the business and accelerate growth.More exciting news for us this quarter continues to come from Smilebox as it grew revenues by 30% in the quarter and continues to be cash flow positive and profitable, with an 18% EBITDA margin this quarter. Smilebox has been exactly the acquisition we thought it would be. It has significantly enhanced our premium revenue, providing a stable, recurring, revenue stream and has helped us diversify our revenue base providing a larger profitable platform for growth. We have also strategically positioned ourselves to address new mobile and tablet platforms. We have begun, and intend to further develop and offer, a range of iPhone, iPad, Android and Windows Mobile / Surface products over time, to answer the increasing penetration and demands of our primary target audience. We believe this is of critical importance for Perion, and one that will serve as the basis for our growth in the future, as mobile devices, and especially tablets, are an ideal platform for our products and consumers. While we already have a few mobile products, including Smilebox mobile, we need to do more now to establish a leadership position with our audience. I am excited to announce that we expect to launch a revolutionary new email app, that for the first time will make your email enjoyable. We expect to launch for the iPad later this year. We will also be releasing major upgrades to our photo offering on mobile platforms and we look to add additional products over the coming quarters. Read the rest of this transcript for free on seekingalpha.com