Raises Full Year 2024 Outlook

Announces Retail Media Investor Update on November 18, 2024

NEW YORK, Aug. 1, 2024 /PRNewswire/ -- Criteo S.A. (NASDAQ: CRTO) ("Criteo" or the "Company"), the commerce media company, today announced financial results for the second quarter ended June 30, 2024.

Second Quarter 2024 Financial Highlights:

The following table summarizes our consolidated financial results for the three months and six months ended June 30, 2024:

Three Months Ended

Six Months Ended

June 30,

June 30,

2024

2023

YoY
Change

2024

2023

YoY
Change

(in millions, except EPS data)

GAAP Results









Revenue

$471

$469

1 %

$921

$914

1 %

Gross Profit

$233

$200

17 %

$450

$381

18 %

Net Income (loss)

$28

$(2)

NM

$37

$(14)

361 %

Gross Profit margin

49 %

43 %

6ppt

49 %

42 %

7 ppt

Diluted EPS

$0.46

$(0.05)

NM

$0.58

$(0.26)

323 %

Cash from operating activities

$17

$1

NM

$31

$43

(28) %

Cash and cash equivalents

$217

$223

(3) %

$217

$223

(3) %











Non-GAAP Results1









Contribution ex-TAC

$267

$240

11 %

$521

$461

13 %

Adjusted EBITDA

$93

$56

67 %

$164

$95

73 %

Adjusted diluted EPS

$1.08

$0.53

104 %

$1.88

$1.03

83 %

Free Cash Flow (FCF)

$(4)

$(44)

91 %

$(3)

$(35)

91 %

FCF / Adjusted EBITDA

(4) %

(79) %

75ppt

(2) %

(37) %

35 ppt

"Our transformation is coming to life and we continue to seize the exciting opportunities in front of us, positioning ourselves for a promising future," said Megan Clarken, Chief Executive Officer of Criteo. "Our focus remains on executing our plan to drive sustainable growth and maximize shareholder value."

Operating Highlights

  • Retail Media Contribution ex-TAC grew 24% year-over-year at constant currency2 and same-retailer Contribution ex-TAC3 retention for Retail Media was 131%.
  • We expanded our platform adoption to 2,900 brands and 225 retailers and marketplaces, including Dollar General, QVC, Belk, MyTheresa, Selfridges and Grab.
  • We announced a strategic collaboration with Microsoft Advertising to drive Retail Media growth.
  • Performance Media4 Contribution ex-TAC was up 11% year-over-year at constant currency.
  • Criteo's activated media spend5 was $4.3 billion in the last 12 months and $1.0 billion in Q2 2024, growing 7% year-over-year at constant currency2.
  • We deployed $102 million of capital for share repurchases in the first half of 2024.
  • Ernst Teunissen was appointed to the Company's Board of Directors at the 2024 Annual Meeting of Shareholders.

___________________________________________________

1 Contribution ex-TAC, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted diluted EPS and Free Cash Flow are not measures calculated in accordance with U.S. GAAP.

2 Constant currency measures exclude the impact of foreign currency fluctuations and is computed by applying the prior year monthly exchange rates to transactions denominated in settlement or billing currencies other than the US dollar.

3 Same-retailer Contribution ex-TAC retention is the Contribution ex-TAC generated by clients that were live with us in a given quarter and are still live with us the same quarter in the following year.

4 Beginning with the first quarter of 2024, Criteo changed its segment reporting structure to two reportable segments: Retail Media and Performance Media. See the Form 8-K filed with the SEC on March 4, 2024 for more details.

5 Activated media spend is defined as the media spend activated on behalf of our Retail Media clients and our Performance Media clients.

Financial Summary

Revenue for Q2 2024 was $471 million, gross profit was $233 million and Contribution ex-TAC was $267 million. Net income for Q2 was $28 million, or $0.46 per share on a diluted basis. Adjusted EBITDA for Q2 was $93 million, resulting in an adjusted diluted EPS of $1.08. As reported, revenue for Q2 increased by 1%, gross profit increased 17% and Contribution ex-TAC increased by 11%. At constant currency, revenue for Q2 increased by 3% and Contribution ex-TAC increased by 14%. Cash flow from operating activities was $17 million in Q2 and Free Cash Flow was $(4) million in Q2. As of June 30, 2024, we had $239 million in cash and marketable securities on our balance sheet.

Sarah Glickman, Chief Financial Officer, said, "We are raising our full-year 2024 guidance after another record quarter in Q2. We enter the second half of the year in a position of strength and confidence to deliver double-digit growth with continued margin expansion."

Second Quarter 2024 Results

Revenue, Gross Profit and Contribution ex-TAC

Revenue increased by 1% year-over-year in Q2 2024, or 3% at constant currency, to $471 million (Q2 2023: $469 million). Gross profit increased by 17% year-over-year in Q2 2024 to $233 million (Q2 2023: $200 million). Gross profit as a percentage of revenue, or gross profit margin, was 49% (Q2 2023: 43%). Contribution ex-TAC in the second quarter increased 11% year-over-year, or increased 14% at constant currency, to $267 million (Q2 2023: $240 million).

  • Retail Media revenue increased 23%, or 23% at constant currency, reflecting continued strength in Retail Media onsite. Retail Media Contribution ex-TAC increased 24%, or 24% at constant currency, driven by continued strength in Retail Media onsite, new client integrations and growing network effects of the platform.
  • Performance Media revenue decreased (2)%, or increased 1% at constant currency, and Performance Media Contribution ex-TAC increased 8%, or 11% at constant currency, driven by the continued traction of Commerce Audiences as more clients adopt full funnel activation.

Net Income (Loss) and Adjusted Net Income

Net income was $28 million in Q2 2024 (Q2 2023: net loss of $(2) million). Net income allocated to shareholders of Criteo was $27 million, or $0.46 per share on a diluted basis (Q2 2023: net loss available to shareholders of $(3) million, or $(0.05) per share on a diluted basis).

Adjusted net income, a non-GAAP financial measure, was $64 million, or $1.08 per share on a diluted basis (Q2 2023: $30 million, or $0.53 per share on a diluted basis).

Adjusted EBITDA and Operating Expenses

Adjusted EBITDA was $93 million, representing an increase of 67% year-over-year (Q2 2023: $56 million). This primarily reflects higher Contribution ex-TAC over the period and effective cost management. Adjusted EBITDA as a percentage of Contribution ex-TAC, or Adjusted EBITDA margin, was 35% (Q2 2023: 23%).

Operating expenses decreased by (1)% year-over-year to $196 million (Q2 2023: $199 million), mostly driven by cost efficiencies partially offset by planned growth investments. Non-GAAP operating expenses decreased by (6)% year-over-year to $149 million (Q2 2023: $157 million).

Cash Flow, Cash and Financial Liquidity Position

Cash flow from operating activities was $17 million in Q2 2024 (Q2 2023: $1 million).

Free Cash Flow, defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment, was $(4) million in Q2 2024 (Q2 2023: $(44) million). On a trailing 12-month basis, Free Cash Flow was $142 million.

Cash and cash equivalents, and marketable securities, were $239 million, a $(120) million decrease compared to December 31, 2023, after spending $102 million on share repurchases in the first half of 2024.

As of June 30, 2024, the Company had total financial liquidity of approximately $675 million, including its cash position, marketable securities, revolving credit facility and treasury shares reserved for M&A.

2024 Business Outlook

The following forward-looking statements reflect Criteo's expectations as of August 1, 2024.

Fiscal year 2024 guidance:

  • We now expect Contribution ex-TAC to grow +10% to +12% at constant currency, compared to our previous guidance of high-single-digit growth at constant currency.
  • We now expect an Adjusted EBITDA margin of approximately 32% of Contribution ex-TAC, compared to our previous guidance of approximately 31% of Contribution ex-TAC.

Third quarter 2024 guidance:

  • We expect Contribution ex-TAC between $264 million and $268 million, or year-over-year growth at constant-currency of +8% to +10%.
  • We expect Adjusted EBITDA between $72 million and $76 million.

The guidance for the second quarter and fiscal year ending December 31, 2024 assumes the following exchange rates for the main currencies impacting our business: a U.S. dollar-euro rate of 0.922, a U.S. dollar-Japanese Yen rate of 155, a U.S. dollar-British pound rate of 0.787, a U.S. dollar-Korean Won rate of 1,363 and a U.S. dollar-Brazilian real rate of 5.15.

The guidance assumes that no additional acquisitions are completed during the third quarter of 2024 or the fiscal year ended December 31, 2024.

Reconciliations of Contribution ex-TAC, Adjusted EBITDA and Adjusted EBITDA margin guidance to the closest corresponding U.S. GAAP measures are not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures; in particular, the measures and effects of equity awards compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our share price. The variability of the above charges could potentially have a significant impact on our future U.S. GAAP financial results.

Retail Media Investor Update

Criteo also announced today that it will webcast its Retail Media investor presentation on November 18, 2024. The event will be an opportunity for the Company to provide an update on its Retail Media business and opportunities ahead.

Non-GAAP Financial Measures

This press release and its attachments include the following financial measures defined as non-GAAP financial measures by the U.S. Securities and Exchange Commission ("SEC"): Contribution ex-TAC, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted diluted EPS, Free Cash Flow and Non-GAAP Operating Expenses. These measures are not calculated in accordance with U.S. GAAP.

Contribution ex-TAC is a profitability measure akin to gross profit. It is calculated by deducting traffic acquisition costs from revenue and reconciled to gross profit through the exclusion of other costs of revenue. Contribution ex-TAC is not a measure calculated in accordance with U.S. GAAP. We have included Contribution ex-TAC because it is a key measure used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions. In particular, we believe that this measure can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Contribution ex-TAC provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors.

Adjusted EBITDA is our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity awards compensation expense, pension service costs, certain restructuring, integration and transformation costs, and certain acquisition costs. Adjusted EBITDA and Adjusted EBITDA margin are key measures used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, we believe that Adjusted EBITDA and Adjusted EBITDA margin can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.

Adjusted Net Income is our net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related assets, certain restructuring, integration and transformation costs, certain acquisition costs, and the tax impact of these adjustments. Adjusted Net Income and Adjusted diluted EPS are key measures used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that Adjusted Net Income and Adjusted diluted EPS can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted Net Income and Adjusted diluted EPS provide useful information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.

Free Cash Flow is defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment. Free Cash Flow Conversion is defined as free cash flow divided by Adjusted EBITDA. Free Cash Flow and Free Cash Flow Conversion are key measures used by our management and board of directors to evaluate the Company's ability to generate cash. Accordingly, we believe that Free Cash Flow and Free Cash Flow Conversion permit a more complete and comprehensive analysis of our available cash flows.

Non-GAAP Operating Expenses are our consolidated operating expenses adjusted to eliminate equity awards compensation expense, pension service costs, certain restructuring, integration and transformation costs, and certain acquisition and integration costs. The Company uses Non-GAAP Operating Expenses to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short-term and long-term operational plans, and to assess and measure our financial performance and the ability of our operations to generate cash. We believe Non-GAAP Operating Expenses reflects our ongoing operating expenses in a manner that allows for meaningful period-to-period comparisons and analysis of trends in our business. As a result, we believe that Non-GAAP Operating Expenses provides useful information to investors in understanding and evaluating our core operating performance and trends in the same manner as our management and in comparing financial results across periods. In addition, Non-GAAP Operating Expenses is a key component in calculating Adjusted EBITDA, which is one of the key measures the Company uses to provide its quarterly and annual business outlook to the investment community.

Please refer to the supplemental financial tables provided in the appendix of this press release for a reconciliation of Contribution ex-TAC to gross profit, Adjusted EBITDA to net income, Adjusted Net Income to net income, Free Cash Flow to cash flow from operating activities, and Non-GAAP Operating Expenses to operating expenses, in each case, the most comparable U.S. GAAP measure. Our use of non-GAAP financial measures has limitations as an analytical tool, and you should not consider such non-GAAP measures in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: 1) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; and 2) other companies may report Contribution ex-TAC, Contribution ex-TAC margin, Adjusted EBITDA, Adjusted Net Income, Free Cash Flow, Non-GAAP Operating Expenses or similarly titled measures but calculate them differently or over different regions, which reduces their usefulness as comparative measures. Because of these and other limitations, you should consider these measures alongside our U.S. GAAP financial results, including revenue and net income.

Forward-Looking Statements Disclosure

This press release contains forward-looking statements, including projected financial results for the quarter ending September 30, 2024 and the year ending December 31, 2024, our expectations regarding our market opportunity and future growth prospects and other statements that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to: failure related to our technology and our ability to innovate and respond to changes in technology, uncertainty regarding our ability to access a consistent supply of internet display advertising inventory and expand access to such inventory, including without limitation uncertainty regarding the timing and scope of proposed changes to and enhancements of the Chrome browser announced by Google, investments in new business opportunities and the timing of these investments, whether the projected benefits of acquisitions materialize as expected, uncertainty regarding international growth and expansion (including related to changes in a specific country's or region's political or economic conditions), the impact of competition, uncertainty regarding legislative, regulatory or self-regulatory developments regarding data privacy matters and the impact of efforts by other participants in our industry to comply therewith, the impact of consumer resistance to the collection and sharing of data, our ability to access data through third parties, failure to enhance our brand cost-effectively, recent growth rates not being indicative of future growth, our ability to manage growth, potential fluctuations in operating results, our ability to grow our base of clients, and the financial impact of maximizing Contribution ex-TAC, as well as risks related to future opportunities and plans, including the uncertainty of expected future financial performance and results and those risks detailed from time-to-time under the caption "Risk Factors" and elsewhere in the Company's SEC filings and reports, including the Company's Annual Report on Form 10-K filed with the SEC on February 23, 2024, and in subsequent Quarterly Reports on Form 10-Q as well as future filings and reports by the Company. Importantly, at this time, macro-economic conditions including inflation and volatile interest rates in the U.S. have impacted Criteo's business, financial condition, cash flow and results of operations.

Except as required by law, the Company undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events, changes in expectations or otherwise.

Conference Call Information

Criteo's senior management team will discuss the Company's earnings on a call that will take place today, August 1, 2024, at 8:00 AM ET, 2:00 PM CET. The conference call will be webcast live on the Company's website at https://criteo.investorroom.com/ and will subsequently be available for replay.

    •

United States:

+1 800 836 8184

    •

International:

+1 646 357 8785

    •

France

080-094-5120

Please ask to be joined into the "Criteo" call.

About Criteo

Criteo (NASDAQ: CRTO) is the global commerce media company that enables marketers and media owners to drive better commerce outcomes. Its industry leading Commerce Media Platform connects thousands of marketers and media owners to deliver richer consumer experiences from product discovery to purchase. By powering trusted and impactful advertising, Criteo supports an open internet that encourages discovery, innovation, and choice. For more information, please visit www.criteo.com.

Contacts

Criteo Investor Relations
Melanie Dambre, m.dambre@criteo.com 

Criteo Public Relations
Jessica Meyers, j.meyers@criteo.com 

Financial information to follow

CRITEO S.A.

Consolidated Statement of Financial Position

(U.S. dollars in thousands, unaudited)



June 30, 2024

December 31, 2023

Assets



Current assets:



Cash and cash equivalents

$                         216,698

$                         336,341

Trade receivables, net of allowances of $ 38.7 million and $ 43.3 million at June 30, 2024 and December 31, 2023, respectively

632,749

775,589

Income taxes

16,673

2,065

Other taxes

132,465

109,306

Other current assets

49,021

48,291

Restricted cash

75,000

75,000

Marketable securities - current portion

16,480

5,970

Total current assets

1,139,086

1,352,562

Property, plant and equipment, net

115,886

126,494

Intangible assets, net

172,744

180,888

Goodwill

519,924

524,197

Right of Use Asset - operating lease

103,507

112,487

Marketable securities - non current portion

5,353

16,575

Non-current financial assets

5,441

5,294

Other non-current assets

59,699

60,742

Deferred tax assets

46,226

52,680

    Total non-current assets

1,028,780

1,079,357

Total assets

$                     2,167,866

$                     2,431,919





Liabilities and shareholders' equity



Current liabilities:



Trade payables

$                         635,208

$                         838,522

Contingencies - current portion

1,373

1,467

Income taxes

3,334

17,213

Financial liabilities - current portion

7,020

3,389

Lease liability - operating - current portion

27,736

35,398

Other taxes

89,322

66,659

Employee - related payables

94,166

113,287

Other current liabilities

97,733

104,552

Total current liabilities

955,892

1,180,487

Deferred tax liabilities

3,061

1,083

Defined benefit plans

4,231

4,123

Financial liabilities - non current portion

306

77

Lease liability - operating - non current portion

78,801

83,051

Contingencies - non current portion

32,625

32,625

Other non-current liabilities

19,760

19,082

    Total non-current liabilities

138,784

140,041

Total liabilities

1,094,676

1,320,528

Commitments and contingencies



Shareholders' equity:



Common shares, €0.025 par value, 59,063,486 and 61,165,663 shares authorized, issued and outstanding at June 30, 2024  and December 31, 2023, respectively.

1,967

2,023

Treasury stock, 4,461,517 and 5,400,572 shares at cost as of June 30, 2024  and December 31, 2023 , respectively.

(154,254)

(161,788)

Additional paid-in capital

761,681

769,240

Accumulated other comprehensive income (loss)

(103,848)

(85,326)

Retained earnings

537,241

555,456

Equity - attributable to shareholders of Criteo S.A.

1,042,787

1,079,605

Non-controlling interests

30,403

31,786

Total equity

1,073,190

1,111,391

Total equity and liabilities

$                     2,167,866

$                     2,431,919

 

CRITEO S.A.

Consolidated Statement of Operations

(U.S. dollars in thousands, except share and per share data, unaudited)



Three Months Ended

Six Months Ended


June 30,

June 30,


2024

2023

2024

2023









Revenue

$    471,307

$    468,934

$    921,362

$    913,950









Cost of revenue







Traffic acquisition cost

(204,214)

(228,717)

(400,381)

(453,115)

Other cost of revenue

(34,248)

(40,435)

(70,913)

(79,544)









Gross profit

232,845

199,782

450,068

381,291









Operating expenses:







Research and development expenses

(59,639)

(67,775)

(126,497)

(131,365)

Sales and operations expenses

(95,069)

(112,511)

(187,911)

(213,753)

General and administrative expenses

(41,199)

(18,537)

(88,368)

(58,707)

Total Operating expenses

(195,907)

(198,823)

(402,776)

(403,825)

Income (loss) from operations

36,938

959

47,292

(22,534)

Financial and Other income

(284)

(1,852)

897

4,975

Income (loss) before taxes

36,654

(893)

48,189

(17,559)

Provision for income tax (expense) benefit

(8,595)

(1,078)

(11,564)

3,517

Net income (loss)

$       28,059

$       (1,971)

$       36,625

$     (14,042)









Net income (loss) available to shareholders of Criteo S.A.

$       26,987

$       (2,876)

$       34,231

$     (14,685)

Net income (loss) available to non-controlling interests

$         1,072

$            905

$         2,394

$            643









Weighted average shares outstanding used in computing per share amounts:







Basic

54,684,560

55,924,824

54,915,140

56,094,887

Diluted

58,974,186

55,924,824

59,151,582

56,094,887









Net income (loss) allocated to shareholders per share:







Basic

$           0.49

$         (0.05)

$           0.62

$         (0.26)

Diluted

$           0.46

$         (0.05)

$           0.58

$         (0.26)

 

CRITEO S.A.

Consolidated Statement of Cash Flows

(U.S. dollars in thousands, unaudited)



Three Months Ended

Six Months Ended


June 30,

June 30,


2024

2023

2024

2023

Net income (loss)

$    28,059

$    (1,971)

$    36,625

$  (14,042)

Non-cash and non-operating items

22,413

16,939

82,574

48,886

          - Amortization and provisions

21,089

10,111

46,324

37,422

          - Equity awards compensation expense (1)

20,686

27,173

47,978

52,341

          - Net (gain) or loss on disposal of non-current assets

574

(7)

574

(8,797)

          - Change in uncertain tax positions

875

(407)

1,757

(467)

          - Net change in fair value of earn-out

(50)

430

3,187

516

          - Change in deferred taxes

4,915

(8,239)

8,089

(20,536)

          - Change in income taxes

(26,165)

(13,478)

(28,420)

(13,615)

          - Other

489

1,356

3,085

2,022

Changes in working capital related to operating activities

(33,285)

(13,640)

(87,995)

8,448

           - (Increase) / Decrease in trade receivables

(21,536)

(34,666)

136,520

129,454

           - Increase / (Decrease) in trade payables

8,711

16,454

(193,210)

(128,557)

           - (Increase) / Decrease in other current assets

12,836

6,942

(24,021)

(6,652)

           - Increase / (Decrease) in other current liabilities

(31,206)

(2,069)

(4,472)

14,597

           - Change in operating lease liabilities and right of use assets

(2,090)

(301)

(2,812)

(394)

CASH FROM OPERATING ACTIVITIES

17,187

1,328

31,204

43,292

Acquisition of intangible assets, property, plant and equipment

(23,675)

(24,312)

(36,968)

(61,507)

Change in accounts payable related to intangible assets, property, plant and equipment

2,556

(21,207)

2,625

(17,231)

Payment for business, net of cash acquired

—

(457)

(527)

(6,957)

Proceeds from disposition of investment

—

—

—

9,625

Change in other non-current financial assets

(139)

(6,259)

(287)

(12,267)

CASH USED FOR INVESTING ACTIVITIES

(21,258)

(52,235)

(35,157)

(88,337)

Proceeds from exercise of stock options

812

431

1,207

1,697

Repurchase of treasury stocks

(40,352)

(23,836)

(102,495)

(74,866)

Cash payment for contingent consideration

—

—

—

(22,025)

Change in other financing activities

(378)

(495)

(810)

(923)

CASH USED FOR FINANCING ACTIVITIES

(39,918)

(23,900)

(102,098)

(96,117)

Effect of exchange rates changes on cash and cash equivalents

(6,175)

(7,673)

(13,507)

(8,855)

Net decrease in cash and cash equivalents and restricted cash

(50,164)

(82,480)

(119,558)

(150,017)

Net cash and cash equivalents and restricted cash at beginning of period

341,862

380,663

411,257

448,200

Net cash and cash equivalents and restricted cash at end of period

$ 291,698

$ 298,183

$ 291,698

$ 298,183









SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION







Cash paid for taxes, net of refunds

$  (23,403)

$  (23,201)

$  (24,571)

$  (31,101)

Cash paid for interest

$       (326)

$          (60)

$       (653)

$       (676)

(1) Share-based compensation expense, net of capitalized stock-based compensation relating to internally developed software according to ASC 718 Compensation - stock compensation accounted for $20.3 million million and $26.7 million of equity awards compensation expense for the quarters ended June 30,  2024 and 2023, respectively, and $47.1 million and $51.4 million of equity awards compensation expense for the six months ended June 30,  2024 and 2023, respectively.

 

CRITEO S.A.

Reconciliation of Cash from Operating Activities to Free Cash Flow

(U.S. dollars in thousands, unaudited)



Three Months Ended

Six Months Ended


June 30,

June 30,


2024

2023

2024

2023









CASH FROM OPERATING ACTIVITIES

$    17,187

$      1,328

$      31,204

$      43,292

Acquisition of intangible assets, property, plant and equipment

(23,675)

(24,312)

(36,968)

(61,507)

Change in accounts payable related to intangible assets, property, plant and equipment

2,556

(21,207)

2,625

(17,231)

FREE CASH FLOW (1)

$    (3,932)

$  (44,191)

$      (3,139)

$    (35,446)

(1) Free Cash Flow is defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment.

 

CRITEO S.A.

Reconciliation of Contribution ex-TAC to Gross Profit

(U.S. dollars in thousands, unaudited)


Three Months Ended


Six Months Ended

June 30,


June 30,

2024

2023

YoY Change

2024

2023

YoY Change












Gross Profit

232,845

199,782

17 %

450,068

381,291

18 %












Other Cost of Revenue

34,248

40,435

(15) %

70,913

79,544

(11) %












Contribution ex-TAC (1)

$     267,093

$     240,217

11 %

$     520,981

$     460,835

13 %

(1) Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric.

 

CRITEO S.A.

Segment Information

(U.S. dollars in thousands, unaudited)




Three Months Ended




Six Months Ended






June 30,




June 30,




Segment

2024

2023

YoY
Change

YoY
Change
at
Constant
Currency
(3)

2024

2023

YoY
Change

YoY
Change
at
Constant
Currency
(3)

Revenue
















Retail Media

$         54,777

$         44,590

23 %

23 %

$      105,649

$         82,611

28 %

28 %

Performance Media (1)

416,530

424,344

(2) %

1 %

815,713

831,339

(2) %

0.1 %

Total

471,307

468,934

1 %

3 %

921,362

913,950

1 %

3 %


















Contribution ex-TAC
















Retail Media

53,866

43,518

24 %

24 %

104,035

80,870

29 %

28 %

Performance Media

213,227

196,699

8 %

11 %

416,946

379,965

10 %

12 %

Total (2)

$      267,093

$      240,217

11 %

14 %

$      520,981

$      460,835

13 %

15 %

(1) Beginning with the first quarter of 2024, Criteo changed its segment reporting structure to two reportable segments: Retail Media and Performance Media. See the Form 8-K filed with the SEC on March 4, 2024 for more details.

(2) Refer to the Non-GAAP Financial Measures section of this filing for a definition of the Non-GAAP metric.

(3) Constant currency measures exclude the impact of foreign currency fluctuations and is computed by applying the prior year monthly exchange rates to transactions denominated in settlement or billing currencies other than the US dollar.

 

CRITEO S.A.

Reconciliation of Adjusted EBITDA to Net Income (Loss)

(U.S. dollars in thousands, unaudited)



Three Months Ended


Six Months Ended



June 30,


June 30,



2024

2023

YoY

Change

2024

2023

YoY

Change

Net income (loss)

$    28,059

$    (1,971)

NM

$    36,625

$  (14,042)

361 %

Adjustments:











Financial (Income) expense

284

1,956

(85) %

(897)

(4,650)

81 %

Provision for income taxes

8,595

1,078

697 %

11,564

(3,517)

429 %

Equity awards compensation expense

21,877

27,831

(21) %

49,169

53,896

(9) %

Pension service costs

172

177

(3) %

344

353

(3) %

Depreciation and amortization expense

25,077

26,606

(6) %

49,995

51,926

(4) %

Acquisition-related costs

—

362

(100) %

—

1,194

(100) %

Net loss contingency on regulatory matters

—

(21,616)

100 %

—

(21,616)

100 %

Restructuring, integration and transformation costs

9,366

21,563

(57) %

17,309

31,165

(44) %

Total net adjustments

65,371

57,957

13 %

127,484

108,751

17 %

Adjusted EBITDA (1)

$    93,430

$    55,986

67 %

$  164,109

$    94,709

73 %

(1) Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric.

 

CRITEO S.A.

Reconciliation from Non-GAAP Operating Expenses to Operating Expenses under GAAP

(U.S. dollars in thousands, unaudited)



Three Months Ended


Six Months Ended



June 30,


June 30,



2024

2023

YoY
Change

2024

2023

YoY
Change

Research and Development expenses

$      (59,639)

$      (67,775)

(12) %

$    (126,497)

$    (131,365)

(4) %

Equity awards compensation expense

9,059

16,339

(45) %

23,653

32,675

(28) %

Depreciation and Amortization expense

12,275

8,518

44 %

24,603

18,844

31 %

Pension service costs

90

94

(4) %

181

186

(3) %

Acquisition-related costs

—

99

(100) %

—

503

(100) %

Restructuring, integration and transformation costs

2,237

4,467

(50) %

2,708

5,341

(49) %

Non GAAP - Research and Development expenses

(35,978)

(38,258)

(6) %

(75,352)

(73,816)

2 %

Sales and Operations expenses

(95,069)

(112,511)

(16) %

(187,911)

(213,753)

(12) %

Equity awards compensation expense

5,334

5,687

(6) %

11,061

10,427

6 %

Depreciation and Amortization expense

3,137

4,059

(23) %

6,370

6,875

(7) %

Pension service costs

26

27

(4) %

52

55

(5) %

Restructuring, integration and transformation costs

4,144

12,667

(67) %

4,638

17,401

(73) %

Non GAAP - Sales and Operations expenses

(82,428)

(90,071)

(8) %

(165,790)

(178,995)

(7) %

General and Administrative expenses

(41,199)

(18,537)

122 %

(88,368)

(58,707)

51 %

Equity awards compensation expense

7,483

5,805

29 %

14,454

10,794

34 %

Depreciation and Amortization expense

435

566

(23) %

888

1,086

(18) %

Pension service costs

56

56

— %

111

112

(1) %

Acquisition-related costs

—

263

(100) %

—

691

(100) %

Restructuring, integration and transformation costs

2,984

4,429

(33) %

9,962

8,423

18 %

Net loss contingency on regulatory matters

—

(21,616)

100 %

—

(21,616)

100 %

Non GAAP - General and Administrative expenses

(30,241)

(29,034)

4 %

(62,953)

(59,217)

6 %

Total Operating expenses

(195,907)

(198,823)

(1) %

(402,776)

(403,825)

— %

Equity awards compensation expense

21,877

27,831

(21) %

49,169

53,896

(9) %

Depreciation and Amortization expense

15,847

13,143

21 %

31,861

26,805

19 %

Pension service costs

172

177

(3) %

344

353

(3) %

Acquisition-related costs

—

362

(100) %

—

1,194

(100) %

Restructuring, integration and transformation costs

9,365

21,563

(57) %

17,308

31,165

(44) %

Net loss contingency on regulatory matters

—

(21,616)

100 %

—

(21,616)

100 %

Total Non GAAP Operating expenses (1)

(148,646)

$    (157,363)

(6) %

(304,094)

(312,028)

(3) %

(1) Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric.

 

CRITEO S.A.

Reconciliation of Adjusted Net Income to Net Income (Loss)

(U.S. dollars in thousands except share and per share data, unaudited)



Three Months Ended


Six Months Ended



June 30,


June 30,



2024

2023

YoY
Change

2024

2023

YoY
Change













Net income (loss)

$        28,059

$        (1,971)

NM

$        36,625

$      (14,042)

361 %

Adjustments:











Equity awards compensation expense

21,877

27,831

(21) %

49,169

53,896

(9) %

Amortization of acquisition-related intangible assets

8,613

8,812

(2) %

17,292

17,345

— %

Acquisition-related costs

—

362

(100) %

—

1,194

(100) %

Net loss contingency on regulatory matters

—

(21,616)

100 %

—

(21,616)

100 %

Restructuring, integration and transformation costs

9,366

21,563

(57) %

17,309

31,165

(44) %

Tax impact of the above adjustments (1)

(4,198)

(5,333)

21 %

(9,186)

(10,282)

11 %

Total net adjustments

35,658

31,619

13 %

74,584

71,702

4 %

Adjusted net income(2)

$        63,717

$        29,648

115 %

$     111,209

$        57,660

93 %













Weighted average shares outstanding











 - Basic

54,684,560

55,924,824


54,915,140

56,094,887

 - Diluted

58,974,186

55,924,824


59,151,582

56,094,887














Adjusted net income per share











 - Basic

$            1.17

$            0.53

121 %

$            2.03

$            1.03

97 %

 - Diluted

$            1.08

$            0.53

104 %

$            1.88

$            1.03

83 %

(1) We consider the nature of the adjustment to determine its tax treatment in the various tax jurisdictions we operate in. The tax impact is calculated by applying the actual tax rate for the entity and period to which the adjustment relates.

(2) Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric.

 

CRITEO S.A.

Constant Currency Reconciliation(1)

(U.S. dollars in thousands, unaudited)



Three Months Ended


Six Months Ended



June 30,


June 30,



2024

2023

YoY

Change

2024

2023

YoY

Change













Gross Profit as reported

$        232,845

$        199,782

17 %

$        450,068

$        381,291

18 %













Other cost of revenue as reported

34,248

40,435

(15) %

70,913

79,544

(11) %













Contribution ex-TAC as reported(2)

267,093

240,217

11 %

520,981

460,835

13 %

Conversion impact U.S. dollar/other currencies

5,602

—


9,324

—

Contribution ex-TAC at constant currency

272,695

240,217

14 %

530,305

460,835

15 %













Traffic acquisition costs as reported

204,214

228,717

(11) %

400,381

453,115

(12) %

Conversion impact U.S. dollar/other currencies

4,580

—


7,089

—

Traffic acquisition costs at constant currency

208,794

228,717

(9) %

407,470

453,115

(10) %













Revenue as reported

471,307

468,934

1 %

921,362

913,950

1 %

Conversion impact U.S. dollar/other currencies

10,181

—


16,412

—

Revenue at constant currency

$        481,488

$        468,934

3 %

$        937,774

$        913,950

3 %

(1) Constant currency measures exclude the impact of foreign currency fluctuations and is computed by applying the prior year monthly exchange rates to transactions denominated in settlement or billing currencies other than the US dollar.

(2) Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric.

 

CRITEO S.A.

Information on Share Count

(unaudited)




Six Months Ended


2024

2023

Shares outstanding as at January 1,

55,765,091

57,263,624

Weighted average number of shares issued during the period

(849,951)

(1,168,737)

Basic number of shares - Basic EPS basis

54,915,140

56,094,887

Dilutive effect of share options, warrants, employee warrants - Treasury method

4,236,442

—

Diluted number of shares - Diluted EPS basis

59,151,582

56,094,887





Shares issued as at June 30, before Treasury stocks

59,063,486

63,337,453

Treasury stocks as of June 30,

(4,461,517)

(7,412,578)

Shares outstanding as of June 30, after Treasury stocks

54,601,969

55,924,875

Total dilutive effect of share options, warrants, employee warrants

7,618,460

9,340,335

Fully diluted shares as at June 30,

62,220,429

65,265,210

 

CRITEO S.A.

Supplemental Financial Information and Operating Metrics

(U.S. dollars in thousands except where stated, unaudited)


YoY

Change

QoQ

Change

Q2

2024

Q1

2024

Q4

2023

Q3

2023

Q2

2023

Q1

2023

Q4

2022

Q3

2022

Q2

2022












Clients

(5) %

— %

17,744

17,767

18,197

18,423

18,646

18,679

18,990

19,008

18,911












Revenue 

1 %

5 %

471,307

450,055

566,302

469,193

468,934

445,016

564,425

446,921

495,090

Americas

2 %

7 %

212,374

198,365

280,597

219,667

208,463

188,288

281,806

201,274

213,340

EMEA

3 %

3 %

168,496

162,842

189,291

158,756

163,969

160,214

185,125

150,915

176,867

APAC

(6) %

2 %

90,437

88,848

96,414

90,770

96,502

96,514

97,494

94,732

104,883












Revenue

1 %

5 %

471,307

450,055

566,302

469,193

468,934

445,016

564,425

446,921

495,090

Retail Media

23 %

8 %

54,777

50,872

76,583

49,813

44,590

38,021

59,801

41,170

54,667

Performance Media

(2) %

4 %

416,530

399,183

489,719

419,380

424,344

406,995

504,624

405,751

440,423












TAC

(11) %

4 %

(204,214)

(196,167)

(249,926)

(223,798)

(228,717)

(224,398)

(281,021)

(233,543)

(280,565)

Retail Media

(15) %

30 %

(911)

(703)

(2,429)

(1,377)

(1,072)

(669)

(2,719)

(4,277)

(18,111)

Performance Media

(11) %

4 %

(203,303)

(195,464)

(247,497)

(222,421)

(227,645)

(223,729)

(278,302)

(229,266)

(262,454)












Contribution ex-TAC (1)

11 %

5 %

267,093

253,888

316,376

245,395

240,217

220,618

283,404

213,378

214,525

Retail Media

24 %

7 %

53,866

50,169

74,154

48,436

43,518

37,352

57,082

36,893

36,556

Performance Media

8 %

5 %

213,227

203,719

242,222

196,959

196,699

183,266

226,322

176,485

177,969












Cash flow from operating activities 

NM

23 %

17,187

14,017

161,340

19,614

1,328

41,964

125,455

41,628

13,972












Capital expenditures

(54) %

60 %

21,119

13,224

19,724

15,849

45,519

33,219

14,522

20,307

15,452












Net cash position

(2) %

(15) %

291,698

341,862

411,257

269,857

298,183

380,663

448,200

407,323

562,546












Headcount

(0.5) %

(2) %

3,498

3,559

3,563

3,487

3,514

3,636

3,716

3,537

3,146












Days Sales Outstanding (days - end of month) (2)

(5) days

(2) days

64

66

58

61

69

74

71

78

76

(1)  Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric.

(2) From September 2023, we have included Iponweb in our calculation of Days Sales Outstanding. Days Sales Outstanding excluding Iponweb would have been 71 days for the same period.

 

Cision View original content:https://www.prnewswire.com/news-releases/criteo-reports-record-second-quarter-2024-results-302211275.html

SOURCE Criteo S.A.

Copyright 2024 PR Newswire

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