NEW YORK, Nov. 3, 2021 /PRNewswire/ -- Criteo S.A. (NASDAQ: CRTO) ("Criteo" or the "Company"), the global technology company that provides the world's leading Commerce Media Platform, today announced financial results for the third quarter ended September 30, 2021 that exceeded the Company's quarterly guidance.

Third Quarter 2021 Financial Highlights:

The following table summarizes our consolidated financial results for the three and nine months ended September 30, 2021 and 2020:


Three Months Ended


Nine Months Ended


September 30,


September 30,


2021

2020


YoY
Change


2021


2020


YoY
Change


(in millions, except EPS data)

GAAP Results











Revenue

$

509


$

470



8

%


$

1,601



$

1,411



13

%

Gross Profit

$

176


$

151



16

%


$

538



$

470



14

%

Net Income

$

24


$

5



358

%


$

63



$

28



125

%

Diluted EPS

$

0.37


$

0.09



311

%


$

0.94



$

0.43



119

%

Cash from operating activities

$

51


$

51



%


$

155



$

141



10

%

Net cash position

$

497


$

627



(21)

%


$

497



$

627



(21)

%












Non-GAAP Results1











Revenue ex-TAC

$

211


$

186



13

%


$

645



$

572



13

%

Revenue ex-TAC margin

41

%

40

%


1ppt


40

%


41

%


(1)ppt

Adjusted EBITDA

$

68


$

49



38

%


$

212



$

148



43

%

Adjusted diluted EPS

$

0.64


$

0.40



60

%


$

1.94



$

1.18



64

%

Free Cash Flow (FCF)

$

35


$

38



(8)

%


$

112



$

98



14

%

FCF / Adjusted EBITDA

51

%

77

%


(26)ppt


53

%


66

%


(13)ppt

"We achieved yet another strong quarter of double-digit growth, driven by the acceleration of our new solutions and healthy performance in retargeting," said Megan Clarken, Chief Executive Officer. "As a global powerhouse in commerce media, we are focused on delivering the best performing commerce audiences at scale for our large and growing base of 22,000 marketer and brand customers across the open Internet. The sustained momentum in our company transformation and solid execution of our Commerce Media Platform strategy position us well to drive long-term sustainable growth and shareholder value."

Q3 2021 Operating Highlights

  • Criteo's media spend activated by the Commerce Media Platform for marketers and media owners was over $2.5 billion in the last 12 months and close to $615M in Q3 growing 23% at constant currency2.
  • We delivered the highest growth in our New Solutions in four quarters at 66% year-over-year at constant currency2, now representing 28% of total revenue ex-TAC.
  • Retail Media revenue ex-TAC grew 65% year-over-year at constant currency2 and same-retailer revenue ex-TAC3 for Retail Media increased 66% year-over-year.
  • We added Lowe's, Walmart Canada, BestBuy and Douglas to our Retail Media Platform.
  • We added over 400 net new clients and closed the quarter with close to 22,000 clients.
  • Same-client revenue3 increased 5% and same-client revenue ex-TAC2 increased 9% year-over-year at constant currency2.
  • About 60% of our daily active users on the web are addressable through media owners we have direct access to, as we continue to build Criteo's first-party media network.
  • Manuela Montagnana was appointed Chief People Officer to lead Criteo's People team and talent strategy.

___________________________________________________

1

Revenue excluding Traffic Acquisition Costs, or Revenue ex-TAC, Revenue ex-TAC margin, Adjusted EBITDA, Adjusted EBITDA at constant currency, Adjusted EBITDA margin, Adjusted diluted EPS, Free Cash Flow and growth at constant currency 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 2020 average exchange rates for the relevant period to 2021 figures.

3

Same-client revenue or Revenue ex-TAC is the revenue or Revenue ex-TAC generated by clients that were live with us in a given quarter and still live with us the same quarter in the following year.

Third Quarter Financial Summary

Revenue for Q3 2021 was $509 million and Revenue ex-TAC was $211 million. Net income was $24 million, or $0.37 per share on a diluted basis. Adjusted EBITDA was $68 million, resulting in an adjusted diluted EPS of $0.64. At constant currency, Revenue increased by 8% and Revenue ex-TAC increased by 14%. Cash flow from operating activities was $155 million and Free Cash Flow was $35 million, growing 14% in the first nine months 2021 to $112 million, representing a Free Cash Flow conversion rate of 53% of Adjusted EBITDA in the first nine months 2021. As of September 30, 2021, we had $554 million in cash and marketable securities on our balance sheet.

Sarah Glickman, Chief Financial Officer, said, "We are raising our financial guidance for the full year 2021 in light of our third quarter outperformance and continued business momentum carrying into the fourth quarter. Importantly, with solid operating margins and strong cash generation, we are well positioned to continue to transform and execute our commerce media vision."

Revenue, Revenue ex-TAC and Gross Profit

Revenue increased by 8% year-over-year in Q3 2021, or 8% at constant currency, to $509 million (Q3 2020: $470 million). Revenue ex-TAC in the third quarter increased 13% year-over-year, or 14% at constant currency, to $211 million (Q3 2020: $186 million). Revenue ex-TAC as a percentage of revenue, or Revenue ex-TAC margin, was 41% (Q3 2020: 40%), up 200 basis points year-over-year, largely driven by Retail Media and the acceleration of our client transition to the Retail Media Platform.

  • Marketing Solutions revenue grew 11% (or 12% at constant currency) and Marketing Solutions revenue ex-TAC grew 8% (or 8% at constant currency), driven by healthy demand from Retail clients, both on our retargeting and audience targeting solutions, partially offset by anticipated identity and privacy changes.
  • Retail Media revenue decreased 14% (or 15% at constant currency) reflecting the impact related to the ongoing client migration to our Retail Media Platform ("RMP"). Retail Media revenue ex-TAC increased 65% (or 65% on a constant currency basis), driven by continued strength in Retail Media onsite, new client integrations and growing network effects of the RMP.
  • In the Americas, Revenue was flat year-over-year, or flat at constant currency, to $204 million and represented 40% of total Revenue. Revenue ex-TAC increased 19% year-over-year, or 18% at constant currency, to $88 million and represented 42% of total Revenue ex-TAC.
  • In EMEA, Revenue increased 12% year-over-year, or 12% at constant currency, to $188 million and represented 37% of total Revenue. Revenue ex-TAC increased 8% year-over-year, or 8% at constant currency, to $76 million and represented 36% of total Revenue ex-TAC.
  • In Asia-Pacific, Revenue increased 18% year-over-year, or 21% at constant currency, to $116 million and represented 23% of total Revenue. Revenue ex-TAC increased 13% year-over-year, or 15% at constant currency, to $47 million and represented 22% of total Revenue ex-TAC.

Gross profit increased by 16% year-over-year in Q3 2021, or 16% at constant currency, to $176 million (Q3 2020: $151 million).

Net Income and Adjusted Net Income

Net income grew 358% to $24 million in Q3 2021 (Q3 2020: $5 million). Net income margin as a percentage of revenue was 5% (Q3 2020: 1%). Net income available to shareholders of Criteo S.A. was $23 million, or $0.37 per share on a diluted basis (Q3 2020: $5 million, or $0.09 per share on a diluted basis).

Adjusted Net Income, or net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related intangible assets, acquisition-related costs, restructuring related and transformation costs and the tax impact of these adjustments, was $41 million, or $0.64 per share on a diluted basis (Q3 2020: $24 million, or $0.40 per share on a diluted basis).

Adjusted EBITDA and Operating Expenses

Adjusted EBITDA increased 38% year-over-year, or 37% at constant currency, to $68 million (Q3 2020: $49 million), driven by the Revenue ex-TAC performance over the period and effective cost management balanced with growth investments. Adjusted EBITDA as a percentage of Revenue ex-TAC, or Adjusted EBITDA margin, was 32% (Q3 2020: 27%).

Operating expenses remained flat at $144 million (Q3 2020: $143 million), reflecting investments in our growth areas, including Product, Sales and R&D, balanced with disciplined and effective expense management. Operating expenses, excluding the impact of equity awards compensation expense, pension costs, acquisition-related costs, restructuring related and transformation costs, and depreciation and amortization, which we refer to as Non-GAAP Operating Expenses, increased by 6% or $7 million, to $123 million (Q3 2020: $117 million).

Cash Flow, Cash and Financial Liquidity Position

Cash flow from operating activities was flat year-over-year to $51 million in Q3 2021 (Q3 2020: $51 million) and grew 10% to $155 million in the first nine months of 2021 (9 months 2020: $141 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, decreased 8% to $35 million in Q3 2021 (Q3 2020: $38 million), and grew 14% in the first nine months 2021 to $112 million (9 months 2020: $98 million), driving a Free Cash Flow conversion rate of 53% of Adjusted EBITDA in the first nine months 2021 (9 months 2020: 67%).

Cash and cash equivalents increased $9 million compared to December 31, 2020 to $497 million and $554 million including marketable securities, after spending $73 million on share repurchases in the first nine months 2021.

As of September 30, 2021, the Company had total financial liquidity in excess of $1 billion, including its cash position, marketable securities, Revolving Credit Facility and treasury shares reserved for M&A.

Business Outlook

The following forward-looking statements reflect Criteo's expectations as of November 3, 2021.

Fiscal year 2021 guidance:

  • We raise our Revenue ex-TAC growth outlook to approximately +10% at constant-currency.
  • We raise our Adjusted EBITDA margin outlook to approximately 35% of Revenue ex-TAC.

Fourth quarter 2021 guidance:

  • We expect Revenue ex-TAC between $271 million and $274 million, or year-over-year growth at constant-currency of +8% to +9%.
  • We expect Adjusted EBITDA between $107 million and $110 million, or an Adjusted EBITDA margin of 39% to 40%.

The above guidance for the fourth quarter and fiscal year ending December 31, 2021 assumes the following exchange rates for the main currencies impacting our business: a U.S. dollar-euro rate of 0.839, a U.S. dollar-Japanese Yen rate of 109, a U.S. dollar-British pound rate of 0.717, a U.S. dollar-Korean Won rate of 1,144 and a U.S. dollar-Brazilian real rate of 5.34.

The above guidance assumes no acquisitions are completed during the fourth quarter and fiscal year ended December 31, 2021.

Reconciliation of Revenue ex-TAC and Adjusted EBITDA guidance to the closest corresponding U.S. GAAP measures is 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

Extension of Share Repurchase Authorization from $100 million to $175 million

Criteo continues to execute on its strategic plan and Company transformation, investing in the growth of the business and leveraging its strong balance sheet position.

Criteo today announces that the board of directors has authorized the extension of its current share repurchase program of up to $100 million of the Company's outstanding American Depositary Shares to an increased amount of up to $175 million. The Company intends to use repurchased shares under this extended program to satisfy employee equity obligations in lieu of issuing new shares, which would limit future dilution for its shareholders, as well as to fund potential acquisitions in the future.

Under the terms of the authorization, the stock purchases may be made from time to time on the NASDAQ Global Select Market in compliance with applicable state and federal securities laws and applicable provisions of French corporate law. The timing and amounts of any purchases will be based on market conditions and other factors including price, regulatory requirements and capital availability, as determined by Criteo's management team. The program does not require the purchase of any minimum number of shares and may be suspended, modified or discontinued at any time without prior notice.

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"): Revenue ex-TAC, Revenue ex-TAC by Region, Revenue ex-TAC by Solution, Revenue ex-TAC margin, 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.

Revenue ex-TAC is our revenue excluding Traffic Acquisition Costs ("TAC") generated over the applicable measurement period and Revenue ex-TAC by Region reflects our Revenue ex-TAC by our geographies. Revenue ex-TAC, Revenue ex-TAC by Region, Revenue ex-TAC by Solution, and Revenue ex-TAC margin are key measures used by our management and board of directors to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the elimination of TAC from revenue can provide a useful measure for period-to-period comparisons of our business and across our geographies.

Accordingly, we believe that Revenue ex-TAC, Revenue ex-TAC by Region, Revenue ex-TAC by Solution and Revenue ex-TAC margin provide useful information to investors and the market generally in understanding and evaluating our operating results 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 and restructuring related and transformation 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 by eliminating equity awards compensation expense, pension service costs and restructuring related and transformation costs, 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 intangible assets, restructuring related and transformation 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 by eliminating equity awards compensation expense, amortization of acquisition-related intangible assets, restructuring related and transformation costs and the tax impact of these adjustments, 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 the impact of depreciation and amortization, equity awards compensation expense, pension service costs, and restructuring related and transformation 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 Revenue ex-TAC to revenue, Revenue ex-TAC by Region to revenue by region, Revenue ex-TAC by Solution to revenue by solution, 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 Revenue ex-TAC, Revenue ex-TAC by Region, Revenue ex-TAC by Solution, 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, 2021 and the year ended December 31, 2021, 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 the scope and impact of the COVID-19 pandemic on our employees, operations, revenue and cash flows, 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, 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 Revenue 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 26, 2021, and in subsequent Quarterly Reports on Form 10-Q as well as future filings and reports by the Company. Importantly, at this time, the COVID-19 pandemic continues to have an impact on Criteo's business, financial condition, cash flow and results of operations. There are significant uncertainties about the duration and the extent of the impact of the COVID-19 pandemic.

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, November 3, 2021, at 8:00 AM ET, 1:00 PM CET. The conference call will be webcast live on the Company's website http://ir.criteo.com and will subsequently be available for replay.

U.S. callers:                    +1 855 209 8212

International callers:        +1 412 317 0788 or +33 1 76 74 05 02

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

About Criteo

Criteo (NASDAQ: CRTO) is the global technology company that provides the world's leading Commerce Media Platform. 2,700 Criteo team members partner with over 21,000 marketers and thousands of media owners around the globe to activate the world's largest set of commerce data to drive better commerce outcomes. By powering trusted and impactful advertising, Criteo brings richer experiences to every consumer while supporting a fair and open internet that enables discovery, innovation and choice. For more information, please visit www.criteo.com.

Contacts

Criteo Investor Relations
Edouard Lassalle, SVP, Market Relations & Capital Markets, e.lassalle@criteo.com
Melanie Dambre, Director, Investor Relations, m.dambre@criteo.com

Criteo Public Relations
Maribel Henriquez, Senior Communications Manager, m.henriquez@criteo.com

Financial information to follow

CRITEO S.A.

Consolidated Statement of Financial Position

(U.S. dollars in thousands, unaudited)




September 30, 2021


December 31, 2020

Assets





Current assets:





Cash and cash equivalents


$

497,458



$

488,011


 Trade receivables, net of allowances of $44.7 million and $39.9 million at September
30, 2021 and December 31, 2020, respectively 


439,493



474,055


Income taxes


14,276



11,092


Other taxes


75,214



69,987


Other current assets


23,185



21,405


Marketable securities - current portion


46,311




Total current assets


1,095,937



1,064,550


Property, plant and equipment, net


150,112



189,505


Intangible assets, net


89,288



79,744


Goodwill


330,561



325,805


Right of Use Asset - operating lease


117,273



114,012


Marketable securities - non current portion


10,000



41,809


Non-current financial assets


7,371



18,109


Deferred tax assets


13,951



19,876


    Total non-current assets


718,556



788,860


Total assets


$

1,814,493



$

1,853,410







Liabilities and shareholders' equity





Current liabilities:





Trade payables


$

349,985



$

367,025


Contingencies


2,828



2,250


Income taxes


489



2,626


Financial liabilities - current portion


489



2,889


Lease liability - operating - current portion


31,309



48,388


Other taxes


53,249



58,491


Employee - related payables


72,679



85,272


Other current liabilities


38,818



33,390


Total current liabilities


549,846



600,331


Deferred tax liabilities


4,138



5,297


Defined benefit plans


6,167



6,167


Financial liabilities - non current portion


367



386


Lease liability - operating - non current portion


92,859



83,007


Other non-current liabilities


9,864



5,535


    Total non-current liabilities


113,395



100,392


Total liabilities


663,241



700,723


Commitments and contingencies





Shareholders' equity:





Common shares, €0.025 par value, 66,315,019 and 66,272,106  shares authorized,
issued and outstanding at September 30, 2021 and December 31, 2020,
respectively.


2,162



2,161


Treasury stock, 5,544,527 and  5,632,536 shares at cost as of September 30, 2021
and December 31, 2020, respectively.


(122,390)



(85,570)


Additional paid-in capital


727,613



693,164


Accumulated other comprehensive income (loss)


(25,349)



16,028


Retained earnings


534,320



491,359


Equity - attributable to shareholders of Criteo S.A.


1,116,356



1,117,142


Non-controlling interests


34,896



35,545


Total equity


1,151,252



1,152,687


Total equity and liabilities


$

1,814,493



$

1,853,410


 

CRITEO S.A.

Consolidated Statement of Income

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




Three Months Ended




Nine Months Ended





September 30,




September 30,





2021


2020


YoY

Change


2021


2020


YoY

Change














Revenue


$

508,580



$

470,345



8

%


$

1,600,968



$

1,411,335



13

%














Cost of revenue













Traffic acquisition cost


(297,619)



(284,401)



5

%


(956,364)



(839,463)



14

%

Other cost of revenue


(34,935)



(34,608)



1

%


(107,011)



(102,328)



5

%














Gross profit


176,026



151,336



16

%


537,593



469,544



14

%














Operating expenses:













Research and development expenses


(33,345)



(30,954)



8

%


(106,957)



(99,716)



7

%

Sales and operations expenses


(75,619)



(83,659)



(10)

%


(235,724)



(244,414)



(4)

%

General and administrative expenses


(34,877)



(28,672)



22

%


(108,779)



(83,772)



30

%

Total Operating expenses


(143,841)



(143,285)



0.4

%


(451,460)



(427,902)



6

%

Income from operations


32,185



8,051



300

%


86,133



41,642



107

%

Financial expense


(154)



(491)



(69)

%


(1,391)



(1,828)



(24)

%

Income before taxes


32,031



7,560



324

%


84,742



39,814



113

%

Provision for income taxes


(7,801)



(2,267)



244

%


(22,033)



(11,943)



84

%

Net Income


$

24,230



$

5,293



358

%


$

62,709



$

27,871



125

%














Net income available to shareholders of Criteo
S.A.


$

23,481



$

5,227



349

%


$

60,691



$

26,402



130

%

Net income available to non-controlling interests


$

749



$

66



1,035

%


$

2,018



$

1,469



37

%














Weighted average shares outstanding used in
computing per share amounts:













Basic


60,873,594



60,080,598





60,759,613



61,059,345




Diluted


64,197,686



61,027,795





64,313,526



61,644,827

















Net income allocated to shareholders per share:













Basic


$

0.39



$

0.09



333

%


$

1.00



$

0.43



133

%

Diluted


$

0.37



$

0.09



311

%


$

0.94



$

0.43



119

%

 

CRITEO S.A.

Consolidated Statement of Cash Flows

(U.S. dollars in thousands, unaudited)




Three Months Ended




Nine Months Ended





September 30,




September 30,





2021


2020


YoY

Change


2021


2020


YoY

Change

Net income


$

24,230



$

5,293



358

%


$

62,709



$

27,871



125

%

Non-cash and non-operating items


37,668



39,831



(5)

%


103,573



105,742



(2)

%

           - Amortization and provisions


25,533



24,680



3

%


67,919



79,631



(15)

%

           - Equity awards compensation expense (1)


13,289



6,803



95

%


32,174



22,465



43

%

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


735



591



24

%


4,694



2,734



72

%

           - Change in deferred taxes


2,263



(80)



NM



4,568



(7,697)



(159)

%

           - Change in income taxes


(4,165)



6,684



(162)

%


(5,820)



7,411



(179)

%

           - Other


13



1,153



(99)

%


38



1,198



(97)

%

Changes in working capital related to operating activities


(10,719)



6,032



(278)

%


(11,381)



7,663



(249)

%

           - (Increase) / Decrease in trade receivables


(9,541)



(4,177)



128

%


16,654



122,529



(86)

%

           - Increase / (Decrease) in trade payables


14,213



8,494



67

%


(5,693)



(95,303)



(94)

%

           - (Increase) / Decrease in other current assets


(7,523)



(2,762)



172

%


(12,710)



2,288



(656)

%

           - Increase / (Decrease) in other current liabilities


(4,705)



6,303



(175)

%


(5,774)



(20,145)



(71)

%

           - Change in operating lease liabilities and right of use assets


(3,163)



(1,826)



73

%


(3,858)



(1,706)



126

%

CASH FROM OPERATING ACTIVITIES


51,179



51,156



%


154,901



141,276



10

%

Acquisition of intangible assets, property, plant and equipment


(16,767)



(16,308)



3

%


(44,383)



(57,037)



(22)

%

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


810



3,410



(76)

%


1,518



13,870



(89)

%

Payment for businesses, net of cash acquired


71



(3)



NM



(9,527)



(3)



NM


Change in other non-current financial assets


6,505



(280)



NM



(13,803)



(20,629)



(33)

%

CASH USED FOR INVESTING ACTIVITIES


(9,381)



(13,181)



(29)

%


(66,195)



(63,799)



4

%

Proceeds from borrowings under line-of-credit agreement




3,193



(100)

%




157,503



(100)

%

Repayment of borrowings


10



(12)



(183)

%


(1,262)



(181)



597

%

Proceeds from exercise of stock options


12,113



117



NM



21,688



101



NM


Repurchase of treasury stocks


(37,682)



(10,554)



257

%


(72,611)



(43,655)



66

%

Change in other financial liabilities


(2,888)



(1,083)



167

%


(3,636)



(2,010)



81

%

CASH (USED FOR) FROM FINANCING ACTIVITIES


(28,447)



(8,339)



241

%


(55,821)



111,758



(150)

%

Effect of exchange rates changes on cash and cash
equivalents


(5,414)



18,927



(129)

%


(23,438)



18,746



(225)

%

Net increase in cash and cash equivalents


7,937



48,563



(84)

%


9,447



207,981



(95)

%

Net cash and cash equivalents at beginning of period


489,521



578,181



(15)

%


488,011



418,763



17

%

Net cash and cash equivalents at end of period


$

497,458



$

626,744



(21)

%


$

497,458



$

626,744



(21)

%














SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION













Cash paid for taxes, net of refunds


$

(9,703)



$

4,337



(324)

%


$

(23,285)



$

(12,229)



90

%

Cash paid for interest


$

(403)



$

(153)



163

%


$

(1,139)



$

(819)



39

%


(1) 

Share-based compensation expense according to ASC 718 Compensation - stock compensation accounted for $12.8 million and $6.5 million of equity awards compensation expense for the quarter ended September  30, 2021 and 2020, respectively, and $30.8 million and $21.4 million of equity awards compensation for the nine months ended September, 30, 2021 and 2020, respectively.

 

CRITEO S.A.

Reconciliation of Cash from Operating Activities to Free Cash Flow

(U.S. dollars in thousands, unaudited)




Three Months Ended




Nine Months Ended





September 30,




September 30,





2021


2020


YoY

Change


2021


2020


YoY

Change














CASH FROM OPERATING ACTIVITIES


$

51,179



$

51,156



%


$

154,901



$

141,276



10

%

Acquisition of intangible assets, property, plant and
equipment


(16,767)



(16,308)



3

%


(44,383)



(57,037)



(22)

%

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


810



3,410



(76)

%


1,518



13,870



(89)

%

FREE CASH FLOW (1)


$

35,222



$

38,258



(8)

%


$

112,036



$

98,109



14

%


(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 Revenue ex-TAC to Revenue

(U.S. dollars in thousands, unaudited)





Three Months Ended






Nine Months Ended








September 30,






September 30,






Region


2021


2020


YoY
Change


YoY
Change at
Constant

Currency


2021


2020


YoY
Change


YoY
Change at
Constant
Currency

Revenue


















Americas


$

204,428



$

204,618



%


%


$

629,555



$

582,037



8

%


8

%


EMEA


188,354



167,800



12

%


12

%


609,753



517,535



18

%


12

%


Asia-Pacific


115,798



97,927



18

%


21

%


361,660



311,763



16

%


15

%


Total


508,580



470,345



8

%


8

%


1,600,968



1,411,335



13

%


11

%



















Traffic acquisition costs (1)


















Americas


(116,796)



(130,756)



(11)

%


(11)

%


(378,756)



(366,095)



3

%


4

%


EMEA


(111,869)



(97,272)



15

%


15

%


(363,264)



(295,822)



23

%


16

%


Asia-Pacific


(68,954)



(56,373)



22

%


25

%


(214,344)



(177,546)



21

%


19

%


Total


(297,619)



(284,401)



5

%


5

%


(956,364)



(839,463)



14

%


11

%



















Revenue ex-TAC (1)


















Americas


87,632



73,862



19

%


18

%


250,799



215,942



16

%


16

%


EMEA


76,485



70,528



8

%


8

%


246,489



221,713



11

%


6

%


Asia-Pacific


46,844



41,554



13

%


15

%


147,316



134,217



10

%


8

%


Total


$

210,961



$

185,944



13

%


14

%


$

644,604



$

571,872



13

%


10

%


















Three Months Ended






Nine Months Ended








September 30,






September 30,






Solution


2021


2020


YoY
Change


YoY
Change at
Constant
Currency


2021


2020


YoY
Change


YoY
Change at
Constant
Currency

Revenue


















Marketing Solutions


$

458,622



$

412,126



11

%


12

%


$

1,429,277



$

1,263,169



13

%


11

%


Retail Media (2)


49,958



58,219



(14)

%


(15)

%


171,691



148,166



16

%


14

%


Total


508,580



470,345



8

%


8

%


1,600,968



1,411,335



13

%


11

%



















Traffic acquisition costs (1)


















Marketing Solutions


(276,498)



(243,616)



13

%


14

%


(861,503)



(735,663)



17

%


15

%


Retail Media (2)


(21,121)



(40,785)



(48)

%


(49)

%


(94,861)



(103,800)



(9)

%


(10)

%


Total


(297,619)



(284,401)



5

%


5

%


(956,364)



(839,463)



14

%


11

%



















Revenue ex-TAC (1)


















Marketing Solutions


182,124



168,510



8

%


8

%


567,774



527,506



8

%


5

%


Retail Media (2)


28,837



17,434



65

%


65

%


76,830



44,366



73

%


70

%


Total


$

210,961



$

185,944



13

%


14

%


$

644,604



$

571,872



13

%


10

%




















(1) 

We define Revenue ex-TAC as our revenue excluding traffic acquisition costs generated over the applicable measurement period. Revenue ex-TAC, Traffic Acquisition Costs, Revenue ex-TAC by Region and Revenue ex-TAC by Solution are not measures calculated in accordance with U.S. GAAP. We have included Revenue ex-TAC, Traffic Acquisition Costs,  Revenue ex-TAC by Region and Revenue ex-TAC by Solution because they 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 the elimination of TAC from revenue and review of these measures by region and solution can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Revenue ex-TAC, Traffic Acquisition Costs, Revenue ex-TAC by Region, and Revenue ex-TAC by Solution provide 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. Our use of Revenue ex-TAC, Traffic Acquisition Costs, Revenue ex-TAC by Region and Revenue ex-TAC by Solution has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; (b) other companies may report Revenue, Traffic Acquisition Costs, Revenue ex-TAC by Region and Revenue ex-TAC by Solution, or similarly titled measures but define the regions, and product families differently, which reduces their effectiveness as a comparative measure; and (c) other companies may report Revenue ex-TAC or similarly titled measures but calculate them differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Revenue ex-TAC and Revenue, Traffic Acquisition Costs,  Revenue ex-TAC by Region and Revenue ex-TAC by Solution alongside our other U.S. GAAP financial results, including revenue. The above tables provide a reconciliation of Revenue ex-TAC to revenue, Revenue ex-TAC by Region to revenue by region and Revenue ex-TAC by Solution to revenue by solution.


(2) 

Criteo operates as one operating segment. From January 1, 2021 we have disaggregated revenues between Marketing Solutions and Retail Media.  A strategic building block of Criteo's Commerce Media Platform, the Retail Media Platform, introduced in June 2020, is a self-service solution providing transparency, measurement and control to brands and retailers. In all arrangements running on this platform, Criteo recognizes revenue on a net basis, whereas revenue from arrangements running on legacy Retail Media solutions are accounted for on a gross basis. We expect most clients using Criteo's legacy Retail Media solutions to transition to this platform by the second half of 2022. As new clients onboard and existing clients transition to the Retail Media Platform, Revenue may decline but Revenue ex-TAC margin will increase. Revenue ex-TAC will not be impacted by this transition.

 

CRITEO S.A.

Reconciliation of Adjusted EBITDA to Net Income

(U.S. dollars in thousands, unaudited)





Three Months Ended




Nine Months Ended





September 30,




September 30,





2021


2020


YoY

Change


2021


2020


YoY

Change

Net income


$

24,230



$

5,293



358

%


$

62,709



$

27,871



125

%

Adjustments:













Financial expense


154



491



(69)

%


1,391



1,828



(24)

%

Provision for income taxes


7,801



2,267



244

%


22,033



11,943



84

%

Equity awards compensation expense


13,290



6,803



95

%


32,841



22,465



46

%

Research and development


4,858



3,333



46

%


11,572



7,771



49

%

Sales and operations


3,875



3,190



21

%


9,880



8,380



18

%

General and administrative


4,557



280



NM



11,389



6,314



80

%

Pension service costs


330



572



(42)

%


1,005



1,649



(39)

%

Research and development


170



286



(41)

%


520



824



(37)

%

Sales and operations


52



101



(49)

%


158



291



(46)

%

General and administrative


108



185



(42)

%


327



534



(39)

%

Depreciation and amortization expense


22,301



21,752



3

%


66,646



66,098



0.8

%

Cost of revenue (data center equipment)


15,520



14,712



5

%


46,508



40,581



15

%

Research and development (1)


2,557



1,721



49

%


6,517



9,029



(28)

%

Sales and operations


3,545



4,176



(15)

%


11,201



12,737



(12)

%

General and administrative


679



1,143



(41)

%


2,420



3,751



(35)

%

Acquisition-related costs


2,091



112



NM



5,138



112



NM


General and administrative


2,091



112



NM



5,138



112



NM


Restructuring related and transformation (gain )costs (2)


(1,767)



12,181



(115)

%


19,865



15,606



27

%

Research and development


(1,029)



1,985



(152)

%


5,238



3,493



50

%

Sales and operations


(106)



5,357



(102)

%


8,812



6,793



30

%

General and administrative


(632)



4,839



(113)

%


5,815



5,320



9

%

Total net adjustments


44,200



44,178



%


148,919



119,701



24

%

Adjusted EBITDA (3)


$

68,430



$

49,471



38

%


$

211,628



$

147,572



43

%


(1) 

For the Nine Months Ended September 30, 2020, the Company recognized an accelerated amortization expense for Manage technology due to a revised useful life in 2019 ($4.0 million in Research and development).


(2)

For the Three Months and the Nine Months Ended September 2021, and September 2020, respectively, the Company recognized restructuring related and transformation costs following its new organizational structure implemented to support its Commerce Media Platform strategy:

 


Three Months Ended


Nine Months Ended


September 30,


September 30,


2021


2020


2021


2020

(Gain) from forfeitures of share-based compensation awards





(666)




Facilities related (gain) costs

(1,645)



7,023



14,692



8,817


Payroll related (gain) costs

(334)



2,858



4,637



4,489


Consulting costs related to transformation

212



2,300



1,202



2,300


Total restructuring related and transformation (gain) costs

$

(1,767)



$

12,181



$

19,865



$

15,606




















For the three months ended and the nine months ended September 30, 2021 and September 30, 2020, respectively, the cash outflows related to restructuring related and transformation costs were $4.4 million and $ 6.2 million, and $20.9 million and $13.0 million respectively, and were mainly comprised of payroll costs, broker and termination penalties related to real-estate facilities and other consulting fees.


(3) 

We define Adjusted EBITDA as 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, acquisition-related costs and restructuring related and transformation costs. Adjusted EBITDA is not a measure calculated in accordance with U.S. GAAP. We have included Adjusted EBITDA because it is a key measure 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-term and long-term operational plans. In particular, we believe that the elimination of equity awards compensation expense, pension service costs, and restructuring related and transformation costs in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA 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. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; (b) Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (c) Adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation; (d) Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and (e) other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Adjusted EBITDA alongside our U.S. GAAP financial results, including net income.

 

CRITEO S.A.

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

(U.S. dollars in thousands, unaudited)





Three Months Ended




Nine Months Ended





September 30,




September 30,





2021


2020


YoY
Change


2021


2020


YoY
Change

Research and Development expenses


$

(33,345)



$

(30,954)



8

%


$

(106,957)



$

(99,716)



7

%

Equity awards compensation expense


4,858



3,333



46

%


11,572



7,771



49

%

Depreciation and Amortization expense


2,557



1,721



49

%


6,517



9,029



(28)

%

Pension service costs


170



286



(41)

%


520



824



(37)

%

Restructuring related and transformation (gain) costs


(1,029)



1,985



(152)

%


5,238



3,493



50

%

Non GAAP - Research and Development expenses


(26,789)



(23,629)



13

%


(83,110)



(78,599)



6

%

Sales and Operations expenses


(75,619)



(83,659)



(10)

%


(235,724)



(244,414)



(4)

%

Equity awards compensation expense


3,875



3,190



21

%


9,880



8,380



18

%

Depreciation and Amortization expense


3,545



4,176



(15)

%


11,201



12,737



(12)

%

Pension service costs


52



101



(49)

%


158



291



(46)

%

Restructuring related and transformation (gain) costs


(106)



5,357



(102)

%


8,812



6,793



30

%

Non GAAP - Sales and Operations expenses


(68,253)



(70,835)



(4)

%


(205,673)



(216,213)



(5)

%

General and Administrative expenses


(34,877)



(28,672)



22

%


(108,779)



(83,772)



30

%

Equity awards compensation expense


4,557



280



NM



11,389



6,314



80

%

Depreciation and Amortization expense


679



1,143



(41)

%


2,420



3,751



(35)

%

Pension service costs


108



185



(42)

%


327



534



(39)

%

Acquisition-related costs


2,091



112



NM



5,138



112



NM


Restructuring related and transformation (gain) costs


(632)



4,839



(113)

%


5,815



5,320



9

%

Non GAAP - General and Administrative expenses


(28,074)



(22,113)



27

%


(83,690)



(67,741)



24

%

Total Operating expenses


(143,841)



(143,285)



0.4

%


(451,460)



(427,902)



6

%

Equity awards compensation expense


13,290



6,803



95

%


32,841



22,465



46

%

Depreciation and Amortization expense


6,781



7,040



(4)

%


20,138



25,517



(21)

%

Pension service costs


330



572



(42)

%


1,005



1,649



(39)

%

Acquisition-related costs


2,091



112



NM



5,138



112



NM


Restructuring related and transformation (gain) costs


(1,767)



12,181



(115)

%


19,865



15,606



27

%

Total Non GAAP Operating expenses (1)


$

(123,116)



$

(116,577)



6

%


$

(372,473)



$

(362,553)



3

%


(1) 

We define Non-GAAP Operating Expenses as our consolidated operating expenses adjusted to eliminate the impact of depreciation and amortization, equity awards compensation expense, pension service costs, acquisition-related costs and restructuring related and transformation 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 we use to provide our quarterly and annual business outlook to the investment community.

 

CRITEO S.A.

Detailed Information on Selected Items

(U.S. dollars in thousands, unaudited)




Three Months Ended




Nine Months Ended





September 30,




September 30,





2021


2020


YoY
Change


2021


2020


YoY
Change

Equity awards compensation expense













Research and development


$

4,858



$

3,333



46

%


$

11,572



$

7,771



49

%

Sales and operations


3,875



3,190



21

%


9,880



8,380



18

%

General and administrative


4,557



280



NM



11,389



6,314



80

%

Total equity awards compensation expense


13,290



6,803



95

%


32,841



22,465



46

%














Pension service costs













Research and development


170



286



(41)

%


520



824



(37)

%

Sales and operations


52



101



(49)

%


158



291



(46)

%

General and administrative


108



185



(42)

%


327



534



(39)

%

Total pension service costs


330



572



(42)

%


1,005



1,649



(39)

%














Depreciation and amortization expense













Cost of revenue (data center equipment)


15,520



14,712



5

%


46,508



40,581



15

%

Research and development


2,557



1,721



49

%


6,517



9,029



(28)

%

Sales and operations


3,545



4,176



(15)

%


11,201



12,737



(12)

%

General and administrative


679



1,143



(41)

%


2,420



3,751



(35)

%

Total depreciation and amortization expense


22,301



21,752



3

%


66,646



66,098



0.8

%














Acquisition-related costs













General and administrative


2,091



112



NM



5,138



112



NM


Total acquisition-related costs


2,091



112



NM



5,138



112



NM















Restructuring related and transformation (gain) costs













Research and development


(1,029)



1,985



(152)

%


5,238



3,493



50

%

Sales and operations


(106)



5,357



(102)

%


8,812



6,793



30

%

General and administrative


(632)



4,839



(113)

%


5,815



5,320



9

%

Total restructuring related and transformation (gain) costs


$

(1,767)



$

12,181



(115)

%


$

19,865



$

15,606



27

%

 

CRITEO S.A.

Reconciliation of Adjusted Net Income to Net Income

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




Three Months Ended




Nine Months Ended





September 30,




September 30,





2021


2020


YoY
Change


2021


2020


YoY
Change














Net income


$

24,230



$

5,293



358

%


$

62,709



$

27,871



125

%

Adjustments:













Equity awards compensation expense


13,290



6,803



95

%


32,841



22,465



46

%

Amortization of acquisition-related intangible assets (1)


3,303



2,899



14

%


9,174



12,594



(27)

%

Acquisition-related costs


2,091



112



NM



5,138



112



NM


Restructuring related and transformation (gain) costs


(1,767)



12,181



(115)

%


19,865



15,606



27

%

Tax impact of the above adjustments


(114)



(2,986)



(96)

%


(4,686)



(5,611)



(16)

%

Total net adjustments


16,803



19,009



(12)

%


62,332



45,166



38

%

Adjusted net income (2)


$

41,033



$

24,302



69

%


$

125,041



$

73,037



71

%














Weighted average shares outstanding













 - Basic


60,873,594



60,080,598





60,759,613



61,059,345




 - Diluted


64,197,686



61,027,795





64,313,526



61,644,827

















Adjusted net income per share













 - Basic


$

0.67



$

0.40



68

%


$

2.06



$

1.20



72

%

 - Diluted


$

0.64



$

0.40



60

%


$

1.94



$

1.18



64

%


(1) 

For the Nine Months Ended September 30, 2020, the Company recognized an accelerated amortization expense for Manage technology due to a revised useful life in 2019 ($4.0 million in Research and development).


(2) 

We define Adjusted Net Income as our net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related intangible assets, acquisition-related costs, restructuring related and transformation costs, and the tax impact of the foregoing adjustments. Adjusted Net Income is not a measure calculated in accordance with U.S. GAAP. We have included Adjusted Net Income 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 regarding the allocation of capital. In particular, we believe that the elimination of equity awards compensation expense, amortization of acquisition-related intangible assets, restructuring related and transformation costs and the tax impact of the foregoing adjustments in calculating Adjusted Net Income can provide a useful measure for period-to-period comparisons of our business. Accordingly, we believe that Adjusted Net Income 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. Our use of Adjusted Net Income has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) Adjusted Net Income does not reflect the potentially dilutive impact of equity-based compensation or the impact of certain acquisition-related costs; and (b) other companies, including companies in our industry, may calculate Adjusted Net Income or similarly titled measures differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Adjusted Net Income alongside our other U.S. GAAP-based financial results, including net income.

 

CRITEO S.A.

Constant Currency Reconciliation

(U.S. dollars in thousands, unaudited)




Three Months Ended




Nine Months Ended





September 30,




September 30,





2021


2020


YoY

Change


2021


2020


YoY

Change














Revenue as reported


$

508,580



$

470,345



8

%


$

1,600,968



$

1,411,335



13

%

Conversion impact U.S. dollar/other currencies


1,050







(34,266)






Revenue at constant currency(1)


509,630



470,345



8

%


1,566,702



1,411,335



11

%














Traffic acquisition costs as reported


(297,619)



(284,401)



5

%


(956,364)



(839,463)



14

%

Conversion impact U.S. dollar/other currencies


(771)







20,829






Traffic Acquisition Costs at constant currency(1)


(298,390)



(284,401)



5

%


(935,535)



(839,463)



11

%














Revenue ex-TAC as reported(2)


210,961



185,944



13

%


644,604



571,872



13

%

Conversion impact U.S. dollar/other currencies


279







(13,436)






Revenue ex-TAC at constant currency(2)


211,240



185,944



14

%


631,168



571,872



10

%

Revenue ex-TAC(2)/Revenue as reported


41

%


40

%




40

%


41

%
















Other cost of revenue as reported


(34,935)



(34,608)



1

%


(107,011)



(102,328)



5

%

Conversion impact U.S. dollar/other currencies


(334)







547






Other cost of revenue at constant currency(1)


(35,269)



(34,608)



2

%


(106,464)



(102,328)



4

%














Adjusted EBITDA(3)


68,430



49,471



38

%


211,628



147,572



43

%

Conversion impact U.S. dollar/other currencies


(674)







(9,698)






Adjusted EBITDA(3) at constant currency(1)


$

67,756



$

49,471



37

%


$

201,930



$

147,572



37

%

Adjusted EBITDA(3)/Revenue ex-TAC(2)


32

%


27

%




33

%


26

%




(1) 

Information herein with respect to results presented on a constant currency basis is computed by applying prior period average exchange rates to current period results. We have included results on a constant currency basis because it is a key measure used by our management and board of directors to evaluate operating performance. Management reviews and analyzes business results excluding the effect of foreign currency translation because they believe this better represents our underlying business trends. The table above reconciles the actual results presented in this section with the results presented on a constant currency basis.


(2) 

Revenue ex-TAC is not a measure calculated in accordance with U.S. GAAP. See the table entitled "Reconciliation of Revenue ex-TAC to Revenue" for a reconciliation of Revenue Ex-TAC to revenue.


(3)

Adjusted EBITDA is not a measure calculated in accordance with U.S. GAAP. See the table entitled "Reconciliation of Adjusted EBITDA to Net Income" for a reconciliation of Adjusted EBITDA to net income.

 

CRITEO S.A.

Information on Share Count

(unaudited)




Nine Months Ended



2021


2020

Shares outstanding as at January 1,


60,639,570



62,293,508


Weighted average number of shares issued during the period


120,043



(1,234,163)


Basic number of shares - Basic EPS basis


60,759,613



61,059,345


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


3,553,913



585,482


Diluted number of shares - Diluted EPS basis


64,313,526



61,644,827







Shares issued as September 30, before Treasury stocks


66,315,019



66,083,172


Treasury stock as of September 30,


(5,544,527)



(5,989,258)


Shares outstanding as of September 30, after Treasury stocks


60,770,492



60,093,914


Total dilutive effect of share options, warrants, employee warrants


6,861,312



7,581,847


Fully diluted shares as at September 30,


67,631,804



67,675,761


 

CRITEO S.A.

Supplemental Financial Information and Operating Metrics

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



YoY

Change

QoQ
Change

Q3

2021

Q2

2021

Q1

2021

Q4

2020

Q3

2020

Q2

2020

Q1

2020

Q4

2019

Q3

2019













Clients

6%

2%

21,747

21,332

20,626

21,460

20,565

20,359

20,360

20,247

19,971













Revenue 

8%

(8)%

508,580

551,311

541,077

661,282

470,345

437,614

503,376

652,640

522,606

Americas

—%

(8)%

204,428

221,227

203,900

312,817

204,618

185,674

191,745

306,250

213,937

EMEA

12%

(10)%

188,354

209,303

212,096

232,137

167,800

159,621

190,114

216,639

185,556

APAC

18%

(4)%

115,798

120,781

125,081

116,328

97,927

92,319

121,517

129,751

123,113













Revenue

8%

(8)%

508,580

551,311

541,077

661,282

470,345

437,614

503,376

N.A

N.A

Marketing Solutions

11%

(6)%

458,622

487,465

483,190

543,262

412,126

381,270

469,773

N.A

N.A

Retail Media (2)

(14)%

(22)%

49,958

63,846

57,887

118,020

58,219

56,344

33,603

N.A

N.A













TAC

5%

(10)%

(297,619)

(331,078)

(327,667)

(408,108)

(284,401)

(257,698)

(297,364)

(386,388)

(301,901)

Americas

(11)%

(13)%

(116,796)

(134,332)

(127,628)

(203,341)

(130,756)

(115,317)

(120,022)

(189,092)

(129,047)

EMEA

15%

(10)%

(111,869)

(124,747)

(126,648)

(137,384)

(97,272)

(90,153)

(108,397)

(124,939)

(103,899)

APAC

22%

(4)%

(68,954)

(71,999)

(73,391)

(67,383)

(56,373)

(52,228)

(68,945)

(72,357)

(68,955)













TAC

5%

(10)%

(297,619)

(331,078)

(327,667)

(408,108)

(284,401)

(257,698)

(297,364)

N.A

N.A

Marketing Solutions

13%

(6)%

(276,498)

(294,132)

(290,873)

(324,017)

(243,616)

(218,990)

(273,057)

N.A

N.A

Retail Media (2)

(48)%

(43)%

(21,121)

(36,946)

(36,794)

(84,091)

(40,785)

(38,708)

(24,307)

N.A

N.A













Revenue ex-TAC (1)

13%

(4)%

210,961

220,233

213,410

253,174

185,944

179,916

206,012

266,252

220,705

Americas

19%

1%

87,632

86,895

76,272

109,476

73,862

70,357

71,723

117,158

84,890

EMEA

8%

(10)%

76,485

84,556

85,448

94,753

70,528

69,468

81,717

91,700

81,657

APAC

13%

(4)%

46,844

48,782

51,690

48,945

41,554

40,091

52,572

57,394

54,158













Revenue ex-TAC (1)

13%

(4)%

210,961

220,233

213,410

253,174

185,944

179,916

206,012

N.A

N.A

Marketing Solutions

8%

(6)%

182,124

193,333

192,317

219,245

168,510

162,280

196,716

N.A

N.A

Retail Media (2)

65%

7%

28,837

26,900

21,093

33,929

17,434

17,636

9,296

N.A

N.A













Cash flow from
operating activities 

—%

94%

51,179

26,360

77,362

44,080

51,156

33,377

56,743

59,359

43,289













Capital expenditures

24%

22%

15,957

13,128

13,780

22,302

12,898

18,532

11,737

17,520

23,944













Capital
expenditures/Revenue

N.A

N.A

3%

2%

3%

3%

3%

4%

2%

3%

5%













Net cash position

(21)%

2%

497,458

489,521

520,060

488,011

626,744

578,181

436,506

418,763

409,178













Headcount

1%

3%

2,658

2,572

2,532

2,594

2,636

2,685

2,701

2,755

2,794













Days Sales Outstanding
(days - end of month)

N.A

N.A

70

66

64

56

62

61

62

52

57


(1) 

We define Revenue ex-TAC as our revenue excluding traffic acquisition costs generated over the applicable measurement period. Revenue ex-TAC, Traffic Acquisition Costs, Revenue ex-TAC by Region and Revenue ex-TAC by Solution are not measures calculated in accordance with U.S. GAAP. We have included Revenue ex-TAC, Traffic Acquisition Costs,  Revenue ex-TAC by Region and Revenue ex-TAC by Solution because they 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 the elimination of TAC from revenue and review of these measures by region and solution can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Revenue ex-TAC, Traffic Acquisition Costs, Revenue ex-TAC by Region, and Revenue ex-TAC by Solution provide 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. Our use of Revenue ex-TAC, Traffic Acquisition Costs, Revenue ex-TAC by Region and Revenue ex-TAC by Solution has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; (b) other companies may report Revenue, Traffic Acquisition Costs,  Revenue ex-TAC by Region and Revenue ex-TAC by Solution, or similarly titled measures but define the regions, and product families differently, which reduces their effectiveness as a comparative measure; and (c) other companies may report Revenue ex-TAC or similarly titled measures but calculate them differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Revenue ex-TAC and Revenue, Traffic Acquisition Costs,  Revenue ex-TAC by Region and Revenue ex-TAC by Solution alongside our other U.S. GAAP financial results, including revenue. The above tables provide a reconciliation of Revenue ex-TAC to revenue, Revenue ex-TAC by Region to revenue by region and Revenue ex-TAC by Solution to revenue by solution.


(2) 

Criteo operates as one operating segment. From January 1, 2021 we have disaggregated revenues between Marketing Solutions and Retail Media.  A strategic building block of Criteo's Commerce Media Platform, the Retail Media Platform, introduced in June 2020, is a self-service solution providing transparency, measurement and control to brands and retailers. In all arrangements running on this platform, Criteo recognizes revenue on a net basis, whereas revenue from arrangements running on legacy Retail Media solutions are accounted for on a gross basis. We expect most clients using Criteo's legacy Retail Media solutions to transition to this platform by the second half of 2022. As new clients onboard and existing clients transition to the Retail Media Platform, Revenue may decline but Revenue ex-TAC margin will increase. Revenue ex-TAC will not be impacted by this transition.

 

Cision View original content:https://www.prnewswire.com/news-releases/criteo-reports-strong-financial-results-in-third-quarter-2021-301414936.html

SOURCE Criteo S.A.

Copyright 2021 PR Newswire

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