Presentation for the Capital Market

1. Presentation for the Capital Market May 2014

2. Forward-Looking Information All forward-looking information is solely intended for the date that it relates to. Other than the obligation to disclose information as required under the securities laws applicable to the Company, the Company is not required to update or change any information included in this presentation, whether as a result of new information, a future event or other reasons. Similarly, it is clarified that the plans and strategy of the Company included in this presentation are correct as of the publication date and may be changed in accordance with the decision of the Company’s board, as it may be from time to time. Other than trademarks owned by the Company, the trademarks contained in this presentation are the property of their owners and have been used in this presentation for the sake of clarifying the context alone. Use of the trademarks as stated shall not be interpreted as consent or verification regarding the Company’s plans, services or securities. This presentation does not purport to contain or exhaust all of the information which may be relevant for any decision regarding an investment in the Company’s securities. For the avoidance of doubt, it is clarified that the Company does not undertake to update the information included in this presentation. This presentation does not constitute or play a part in any offer or solicitation to purchase the Company’s securities and does not constitute or play a part in a solicitation to receive offers as stated. Such an offering will only take place by means of the prospectus published by the Company, after the receipt of the permits required from the Securities Exchange and the Tel Aviv Stock Exchange. In any event of conflict or inconsistency between this presentation and the prospectus, the provisions of the prospectus shall govern. The presentation also does not constitute any recommendation and/or consultation regarding the Company’s securities. This presentation was prepared by Perion Network Ltd. (“the Company”) as a general presentation about the Company. This presentation is not intended to replace the need to review the Prospectus dated May 18, 2014, and the documents incorporated by reference therein, before making a decision regarding an investment in the Company’s securities. In the event of any conflict between the contents of this presentation and the reports of the Company required by law, the contents of the said reports shall govern. The information included in this presentation shall not constitute any advice, recommendation, opinion or offering regarding the profitability of an investment and shall not replace an independent examination and personal consultation in accordance with the particular circumstances of each investor. This presentation may include forward-looking information as defined in the Securities Law, 5728-1968, including forecasts, estimations, assumptions and other information regarding future matters and events. In certain cases, forward-looking information may be identified through use of terms such as: “expected”, “believes”, “may”, “estimates”, “anticipates”, “intends”, “continues”, “might”, “plans”, “projects”, and other similar terms and phrases. The forward-looking information in this presentation is based on the updated estimations and assumptions of the Company’s management as of the presentation date, which although the Company believes to be reasonable, are uncertain by nature. The forward-looking information involves risks and uncertainty, including factors which are not under the control of the Company, each of which, or a combination thereof, may materially harm the results of the Company’s operations and cause the actual results to be materially different from the forward-looking information.

3. Business Card About Perion • Global and leading media & Internet company that operates in search and digital distribution industries • Provides advanced distribution and monetization solutions to applications and software developers • International management team with a proven track record in dynamic and changing markets • Josef Mandelbaum, CEO - more than 20 years of experience in the Internet & Mobile industries • YacovKaufman, CFO - more than 25 years of experience in international corporations • Consistent rational growth in revenues and profits without substantial debt • Commitment to high quality standards *inc. Client Connect

4. Leading financial data *Inc. ClientConnect, GAAP reconciliations are included in Appendix **Inc. Deferred revenue

5. Strong financial performance ~ 7% 57% 39% *Perion & Client Connect. The data does not include in 2012 substantial bonus from Bing to ClientConnect. GAAP reconciliations are included in Appendix 2013 EBITDA of about $90.2M (about 21% of revenues) without significant debt 2012 EBITDA margin of more than 20%

6. Business development timeline 2014 2011 2012 2007 2010 2000 2006 Successful operations in dynamic and changing market, while performing mergers and acquisitions that complement strategic gaps

7. The value proposition Perion provides app developers with a portfolio of solutions which enable them to efficiently distribute, generate revenue and optimize their software/app while focusing only on what they do best: making a great product

8. Value chain of the Internet industry Search engine (payable click) Advertiser App developer Quality App Advertiser (advertising revenue) Users Perion App’ distribution Revenue from Advertising $$$ Revenue from Advertising $$$ Receives ads and search services $$$ Quality App App’s final user Mature and proven business model that Internet industry in general and search engines in particular are based on

9. Internet and mobile advertising continue to grow sharply Mobile ad spending from total global display advertising: ~16% in 2013. ~27% in 2015 Paid search represents about 48% of all internet advertising revenues Source: eMarketer 2013 Source ZenithOptimedia

10. App developers are coping with significant business challenges • Distribution • Buying traffic is extremely complicated, due to multiple technologies and platforms • 1 out of 4 apps never get installed, mostly for technical reasons • Monetization • The business model is based on free software • Search engines do not adjust their business proposal for software developers • It is difficult to navigate through advertising networks • 80% of the developers fail to establish a profitable business • Optimization • Most app developers are small businesses without analytical capabilities required to: • Improve funnel conversion • Revenue per user (LTV) tracking • Maximizing distribution channels acquiring with a positive ROI There are relatively little profitable applications. Of those, few manage to earn more from $ 5,000

11. Perion’s value proposition: Profit generating business model for application developers • Distribution • Marketing and media channels driven by Business Intelligence • Dominant player that purchases media at significant scale media • Fast Download Manager that recommends additional applications to the end user • Monetization • Revenue share on revenue from sponsored links with search engines - Google, Yahoo, Bing and Ask • Segmented and customer orientated advertising • Optimization • Real-time BI platform based on huge amount of data • Extremely accurate ROI models • User friendly analytical and reporting tools for developers Perion provides a wide range of digital media and web applications solutions that assist applications developers to increase their content’s distribution and monetization capabilities

12. Perion increases it’s presence in the U.S. market Vs. competitors (Ask, AOL) Source: Perion’s data & comScore Explicit Core Search Query Report

13. Agreements with search engines *Agreements with search engines renewed every 1 to 4 years Positive reputation among search engines

14. Business strategy • Strengthening of competitive position and leveraging of scale in the Internet search segment • Strengthening and expanding activities with app and content developers • Ensuring value proposition for app developers and end-user with full transparency • Expanding mobile activities and user centered advertising • Maintaining technological leadership through organic investments and mergers and acquisitions Extension and expansion activities towards attractive and growing segments that improve Perion’s business and financial positioning

15. From S&P Maalot credit rating repot: ilA-/Stable (06/03/2014)* • “The rating of Perion Network Ltd (hereafter: "Perion") is mainly supported by a low-risk financial risk profile as reflected by strong debt coverage ratios” • “We estimate that the company's adjusted debt to EBITDA ratio will be lower than 1.5x over the intermediate term, including M&A activities” • “Our financial risk profile assessment is also supported by the operations of the company, which generally generate positive free cash flows supporting its debt service capabilities” • “We believe that Perion’s merger with "ClientConnect" strengthened the company’s competitive position as well as its debt servicing capabilities” • “In our view, over the intermediate term, the company will direct its internal resources to growth initiatives and will not execute material dividend distribution/buybacks. In addition, we estimate that acquisitions over the near term (up to 1 year), if any, will be funded through debt, and possibly also with an equity component. As previously indicated, we do not expect such acquisition activity to lead to a breach of the coverage ratios which we view as commensurate with the current rating” *Partial quotes. For more information on Perion Network’s credit rating, see S&P Maalotrating report published March 6, 2014.

16. Summary • Perion is among the worldwide leading companies in the search industry and digital distribution • Perion is the second biggest worldwide search services distributor • Business partnerships with leading search engines • Financial strength reflected in high growing profits over the years • Expansion of operations towards attractive segments • Maintaining technological leadership through mergers and acquisitions • Professional management and quality human capital with years of experience and a proven track record in dynamic markets • Standards of a company listed on NASDAQ Perion has grown from a small scale company that focused on developing end user’s products to a global leader with a platform of services and a wide range of revenue streams, along with valuable experience which will enable the Company to take advantage of future business opportunities

17. Appendix

18. GAAP Reconciliation

19. GAAP Reconciliation (cont’d)

20. Balance sheet