NEW YORK, Feb. 9, 2022 /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 fourth quarter and fiscal year ended December 31, 2021 that exceeded the Company's guidance.

Fourth Quarter and Fiscal Year 2021 Financial Highlights:

The following table summarizes our consolidated financial results for the three and twelve months ended December 31, 2021 and 2020:


Three Months Ended


Twelve Months Ended


December 31,


December 31,


2021


2020


YoY
Change


2021


2020


 

YoY

Change









(in millions, except EPS data)

GAAP Results















Revenue

$

653


$

661


(1)

%


$

2,254


$

2,073


9

%

Gross Profit

$

244


$

218


12

%


$

782


$

688


14

%

Net Income

$

75


$

47


60

%


$

138


$

75


84

%

Gross Profit margin


37

%



33

%


4ppt



35

%



33     %


2ppt

Diluted EPS

$

1.15


$

0.73


58

%


$

2.09


$

1.16


80

%

Cash from operating activities

$

66


$

44


50

%


$

221


$

185


19

%

Cash and cash equivalents

$

516


$

488


6

%


$

516


$

488


6

%
















Non-GAAP Results1















Contribution ex-TAC

$

276


$

253


9

%


$

921


$

825


12

%

Contribution ex-TAC margin


42

%



38

%


4ppt



41

%



40     %


1ppt

Adjusted EBITDA

$

111


$

103


7

%


$

322


$

251


28

%

Adjusted diluted EPS

$

1.44


$

0.98


47

%


$

3.38


$

2.17


56

%

Free Cash Flow (FCF)

$

56


$

22


157

%


$

168


$

120


40

%

FCF / Adjusted EBITDA


50

%



21

%


29ppt



52

%



48     %


4ppt

 

"We delivered double-digit growth in 2021, positioning us for a successful 2022 and beyond. Our impressive performance demonstrates the tremendous progress we have made on our transformation," said Megan Clarken, Chief Executive Officer. "In 2022, we are accelerating our strategy around commerce media to enable our customers to drive meaningful commerce outcomes."

Operating Highlights

  • Retail Media Contribution ex-TAC grew 58% year-over-year at constant currency2 in 2021 and 41% in Q4, and same-retailer Contribution ex-TAC3 for Retail Media increased 23% year-over-year in Q4.
  • Marketing Solutions Contribution ex-TAC grew 6% year-over-year at constant currency2 in 2021 and 7% in Q4.
  • Criteo's media spend activated4 by the Commerce Media Platform for marketers and media owners was $2.7 billion in 2021, growing 19% at constant currency2 and close to $850 million in Q4.

___________________________________________________

1 Contribution ex-TAC, Contribution ex-TAC margin, 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 2020 average exchange rates for the relevant period to 2021 figures.
3 Same-client profitability or Contribution ex-TAC is the profitability or Contribution 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.
4 Activated media spend is defined as the sum of our Marketing Solutions revenue and the media spend activated on behalf of our Retail Media clients.

 

  • We signed a three-year global partnership with GroupM to accelerate the demand and supply growth of our Retail Media business.
  • We added Nordstrom and Michaels to our Retail Media Platform in Q4 and successfully launched our first retailer customers in APAC and Latin America.
  • Same-client contribution ex-TAC2 increased 9% year-over-year at constant currency2 in Q4.
  • We had 685 million Daily Active Users (DAUs), over 60% of which on the web are addressable through media owners we have direct access to, as we continue to build Criteo's first-party media network.
  • We executed a purchase agreement to acquire the business of IPONWEB Holding Limited ("IPONWEB"), a market-leading AdTech platform company, for $380 million, which we believe will further distinguish Criteo as the commerce media partner of choice on the open internet for the post third-party identifier world.

New Reporting Segment Structure

We are now reporting results for two reportable segments: Marketing Solutions and Retail Media. We have included a table which presents the operating results of our segments in this press release.

Change in Naming of Non-GAAP Financial Measure

We have renamed Revenue ex-TAC, a non-GAAP financial measure, to Contribution ex-TAC. The change was made as the Company considers that Contribution ex-TAC is a non-GAAP financial measure of profitability, closest to Gross Profit, and not revenue. No changes were made in the calculation methodology.

Financial Summary

Revenue for Q4 2021 was $653 million, gross profit was $244 million and Contribution ex-TAC was $276 million. Net income for Q4 was $75 million, or $1.15 per share on a diluted basis. Adjusted EBITDA for Q4 was $111 million, resulting in an adjusted diluted EPS of $1.44. At constant currency, Revenue for Q4 increased by 1%, gross profit increased 14% and Contribution ex-TAC increased by 11%. Revenue for the fiscal year 2021 was $2,254 million, gross profit was $782 million and Contribution ex-TAC was $921 million, up 8%, 13% and 11% respectively at constant currency. Net income for Fiscal 2021 was $138 million, or $2.09 per share on a diluted basis. Fiscal year 2021 Adjusted EBITDA was $322 million, resulting in an adjusted diluted EPS of $3.38. Cash flow from operating activities was $66 million in Q4 and $221 million in 2021, and Q4 Free Cash Flow was $56 million, up 40% in 2021 to $168 million, representing a Free Cash Flow conversion rate of 52% of Adjusted EBITDA in 2021. As of December 31, 2021, we had $571 million in cash and marketable securities on our balance sheet.

Sarah Glickman, Chief Financial Officer, said, "We delivered strong top line performance and record adjusted EBITDA margin and free cash flow in 2021 while investing for future growth. Looking ahead, we are confident about our growth trajectory and expect to grow Contribution ex-TAC by double digits again in 2022 as we continue to scale and execute on our Commerce Media Platform strategy. We expect to continue to return cash to shareholders with the extension of our share repurchase program in 2022."

Fourth Quarter 2021 Results

Revenue, Gross Profit and Contribution ex-TAC

Revenue decreased by 1% year-over-year in Q4 2021, or increased by 1% at constant currency, to $653 million (Q4 2020: $661 million). Gross profit increased by 12% year-over-year in Q4 2021, or 14% at constant currency, to $244 million (Q4 2020: $218 million). Gross profit as a percentage of revenue, or gross profit margin, was 37% (Q4 2020: 33%). Contribution ex-TAC in the fourth quarter increased 9% year-over-year, or 11% at constant currency, to $276 million (Q4 2020: $253 million). Contribution ex-TAC as a percentage of revenue, or Contribution ex-TAC margin, was 42% (Q4 2020: 38%), up 400 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 6% (or 9% at constant currency) and Marketing Solutions Contribution ex-TAC grew 4% (or 7% 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 36% (or 36% at constant currency) reflecting the impact related to the ongoing client migration to our Retail Media Platform ("RMP"). Retail Media Contribution ex-TAC increased 41% (or 41% on a constant currency basis), driven by continued strength in Retail Media onsite, new client integrations and growing network effects of the RMP.

Net Income and Adjusted Net Income

Net income grew 60% to $75 million in Q4 2021 (Q4 2020: $47 million). Net income margin as a percentage of revenue was 11% (Q4 2020: 7%). Net income available to shareholders of Criteo S.A. was $74 million, or $1.15 per share on a diluted basis (Q4 2020: $45 million, or $0.73 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 $92 million, or $1.44 per share on a diluted basis (Q4 2020: $61 million, or $0.98 per share on a diluted basis).

Adjusted EBITDA and Operating Expenses

Adjusted EBITDA increased 7% year-over-year, or 10% at constant currency, to $111 million (Q4 2020: $103 million), driven by the Contribution ex-TAC performance over the period and effective cost management balanced with growth investments. Adjusted EBITDA as a percentage of Contribution ex-TAC, or Adjusted EBITDA margin, was 40% (Q4 2020: 41%).

Operating expenses increased 18% year-over-year to $179 million (Q4 2020: $151 million), reflecting investments in our growth areas, including Product, Sales and R&D, and higher equity award compensation expense 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 16% or $21 million, to $151 million (Q4 2020: $130 million).

Fiscal Year 2021 Results

Revenue, Gross Profit and Contribution ex-TAC

Revenue increased 9% year-over-year (8% at constant currency), to $2,254 million (FY 2020: $2,073 million). Gross profit increased by 14% year-over-year in 2021, or 13% at constant currency, to $782 million (FY 2020: $688 million). Gross profit as a percentage of revenue, or gross profit margin, was 35% (FY 2020: 33%). Contribution ex-TAC increased 12% year-over-year (11% at constant currency), to $921 million (FY 2020: $825 million). Contribution ex-TAC as a percentage of revenue, or Contribution ex-TAC margin, was 41% (FY 2020: 40%), up 100 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 10% at constant currency) and Marketing Solutions Contribution ex-TAC grew 7% (or 6% 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 7% (or 8% at constant currency) reflecting the impact related to the ongoing client migration to our Retail Media Platform ("RMP"). Retail Media Contribution ex-TAC increased 59% (or 58% on a constant currency basis), driven by continued strength in Retail Media onsite, new client integrations and growing network effects of the RMP.

Net Income and Adjusted Net Income

Net income increased 84% year-over-year to $138 million (FY 2020: $75 million). Net income margin as a percentage of revenue was 6% (FY 2020: 4%). In the course of the fiscal year 2021, we incurred $22 million in restructuring-related and transformation costs. Net income available to shareholders of Criteo S.A. increased 88% year-over-year to $134 million, or $2.09 per share on a diluted basis (FY 2020: $72 million, or $1.16 per share on a diluted basis).

Adjusted net income increased 62% year-over-year to $217 million, or $3.38 per share on a diluted basis (FY 2020: $134 million, or $2.17 per share on a diluted basis).

Adjusted EBITDA and Operating Expenses

Adjusted EBITDA increased 28% year-over-year, or 26% at constant currency, to $322 million (FY 2020: $251 million), driven by the Contribution ex-TAC performance over the period and effective cost management, balanced with growth investments. Adjusted EBITDA as a percentage of Contribution ex-TAC, or Adjusted EBITDA margin, was 35% (FY 2020: 30%).

Operating expenses increased 9% or $51 million, to $630 million (FY 2020: $579 million), mostly driven by higher headcount-related expense, including equity awards compensation expense, partially offset by disciplined expense management across the Company. Non-GAAP operating expenses increased 6% or $31 million, to $524 million (FY 2020: $493 million), largely driven by higher headcount balanced with effective cost discipline across the Company.

Cash Flow, Cash and Financial Liquidity Position

Cash flow from operating activities increased 50% year-over-year to $66 million in Q4 2021 (Q4 2020: $44 million) and grew 19% to $221 million in 2021 (fiscal year 2020: $185 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, increased 157% to $56 million in Q4 2021 (Q4 2020: $22 million), and grew 40% in 2021 to $168 million (fiscal year 2020: $120 million), driving a Free Cash Flow conversion rate of 52% of Adjusted EBITDA in 2021 (fiscal year 2020: 48%).

Cash and cash equivalents increased $28 million compared to December 31, 2020 to $516 million, and to $571 million including marketable securities, up $41 million in 2021, after spending $100 million on share repurchases in 2021.

As of December 31, 2021, the Company had total financial liquidity close to $1.1 billion, or close to $700 million after giving effect to the completion of the contemplated acquisition of IPONWEB, including the Company's cash position, marketable securities, Revolving Credit Facility and treasury shares reserved for M&A.

IPONWEB Acquisition

As previously announced, on December 22, 2021, Criteo executed the purchase agreement to acquire IPONWEB, a market-leading AdTech company with world-class media trading capabilities, for $380 million in a combination of cash and Criteo treasury shares. The closing of the transaction is expected by the end of the first quarter of 2022, subject to customary closing conditions.

With this strategic acquisition, Criteo is expected to accelerate its Commerce Media Platform vision to offer better control to its enterprise marketers – and their agency partners – by leveraging IPONWEB's well-established DSP and SSP solutions. The acquisition is also expected to expand our media owner monetization opportunities and to provide critical services for first-party data management across the ecosystem. Together with IPONWEB, Criteo believes it will distinguish itself as the commerce media partner of choice on the open internet for the post third-party cookie and identifier world.

2022 Business Outlook

The following forward-looking statements reflect Criteo's expectations as of February 9, 2022. Our financial guidance for the first quarter and fiscal year 2022 excludes the contemplated acquisition of IPONWEB.

Fiscal year 2022 guidance:

  • We expect Contribution ex-TAC to grow by 10% to 12% at constant currency.
  • We expect an Adjusted EBITDA margin of approximately 32% of Contribution ex-TAC.

First quarter 2022 guidance:

  • We expect Contribution ex-TAC between $216 million and $220 million, or year-over-year growth at constant-currency of +5% to +7%.
  • We expect Adjusted EBITDA between $52 million and $56 million.

The above guidance for the first quarter and fiscal year ending December 31, 2022 assumes the following exchange rates for the main currencies impacting our business: a U.S. dollar-euro rate of 0.862, a U.S. dollar-Japanese Yen rate of 115, a U.S. dollar-British pound rate of 0.741, a U.S. dollar-Korean Won rate of 1,180 and a U.S. dollar-Brazilian real rate of 5.40.

The above guidance does not include the previously announced acquisition of IPONWEB, which is expected to close by the end of Q1 2022, and assumes that no additional acquisitions are completed during the first quarter of 2022 or the fiscal year ended December 31, 2022.

Reconciliations of Contribution ex-TAC, Adjusted EBITDA and Adjusted EBITDA margin 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 $175 million to $280 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 $175 million of the Company's outstanding American Depositary Shares to an increased amount of up to $280 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"): Contribution ex-TAC, Contribution 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.

Contribution ex-TAC is a profitability measure akin to gross profit. It is calculated by deducting traffic acquisition costs from gross revenue and reconciled to gross profit through the exclusion of other cost 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 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 Contribution ex-TAC to gross profit, Contribution ex-TAC margin, 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, 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 March 31, 2022 and the year ended December 31, 2022, 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, including the successful completion of our acquisition of IPONWEB, 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 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, February 9, 2022, at 8:00 AM ET, 2:00 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. 2,800 Criteo team members partner with 22,000 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, Capital Markets & Investor Relations, 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)




December 31, 2021


December 31, 2020

Assets







Current assets:







Cash and cash equivalents


$

515,527


 

$

488,011

 Trade receivables, net of allowances of $45.4 million and $39.9 million at
December 31, 2021 and December 31, 2020, respectively 



581,988



474,055

Income taxes



8,784



11,092

Other taxes



73,388



69,987

Other current assets



34,182



21,405

Marketable securities - current portion



50,299



Total current assets



1,264,168



1,064,550

Property, plant and equipment, net



139,961



189,505

Intangible assets, net



82,627



79,744

Goodwill



329,699



325,805

Right of Use Asset - operating lease



120,257



114,012

Marketable securities - non current portion



5,000



41,809

Non-current financial assets



6,436



18,109

Deferred tax assets



35,443



19,876

    Total non-current assets



719,423



788,860

Total assets


$

1,983,591


$

1,853,410








Liabilities and shareholders' equity







Current liabilities:







Trade payables


$

430,245


$

367,025

Contingencies



3,059



2,250

Income taxes



6,641



2,626

Financial liabilities - current portion



642



2,889

Lease liability - operating - current portion



34,066



48,388

Other taxes



60,236



58,491

Employee - related payables



98,136



85,272

Other current liabilities



39,523



33,390

Total current liabilities



672,548



600,331

Deferred tax liabilities



3,053



5,297

Defined benefit plans



5,531



6,167

Financial liabilities - non current portion



360



386

Lease liability - operating - non current portion



93,893



83,007

Other non-current liabilities



9,886



5,535

    Total non-current liabilities



112,723



100,392

Total liabilities



785,271



700,723

Commitments and contingencies







Shareholders' equity:







Common shares, €0.025 par value, 65,883,347 and 66,272,106 shares authorized,
issued and outstanding at December 31, 2021 and December 31, 2020,
respectively.



2,149



2,161

Treasury stock, 5,207,873 and  5,632,536 shares at cost as of December 31, 2021
and December 31, 2020, respectively.



(131,560)



(85,570)

Additional paid-in capital



731,248



693,164

Accumulated other comprehensive income (loss)



(40,294)



16,028

Retained earnings



601,588



491,359

Equity - attributable to shareholders of Criteo S.A.



1,163,131



1,117,142

Non-controlling interests



35,189



35,545

Total equity



1,198,320



1,152,687

Total equity and liabilities


$

1,983,591


$

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




Twelve Months Ended





December 31,




December 31,





2021


2020


YoY

Change


2021


2020


YoY

Change














Revenue


$   653,267


$   661,282


(1)     %


$  2,254,235


$  2,072,617


9    %














Cost of revenue













Traffic acquisition cost


(377,076)


(408,108)


(8)     %


(1,333,440)


(1,247,571)


7    %

Other cost of revenue


(31,840)


(34,700)


(8)     %


(138,851)


(137,028)


1    %














Gross profit


244,351


218,474


12      %


781,944


688,018


14      %














Operating expenses:













Research and development expenses


(44,860)


(32,797)


37      %


(151,817)


(132,513)


15     %

Sales and operations expenses


(89,892)


(85,871)


5      %


(325,616)


(330,285)


(1)     %

General and administrative expenses


(43,855)


(32,623)


34      %


(152,634)


(116,395)


31     %

Total Operating expenses


(178,607)


(151,291)


18      %


(630,067)


(579,193)


9     %

Income from operations


65,744


67,183


(2)      %


151,877


108,825


40     %

Financial and Other income (expense)


3,330


(111)


NM


1,939


(1,939)


NM

Income before taxes


69,074


67,072


3      %


153,816


106,886


44     %

Provision for income taxes


5,864


(20,254)


NM


(16,169)


(32,197)


(50)     %

Net Income


$      74,938


$      46,818


60      %


$   137,647


$      74,689


84     %














Net income available to shareholders of Criteo S.A.


$      73,765


$      45,277


63      %


$   134,456


$      71,679


88    %

Net income available to non-controlling interests


$        1,173


$        1,541


(24)      %


$        3,191


$        3,010


6    %














Weighted average shares outstanding used in computing per share amounts:













Basic


60,590,826


60,336,486




60,717,446


60,876,480



Diluted


63,985,850


62,348,489




64,231,637


61,818,593
















Net income allocated to shareholders per share:













Basic


$          1.22


$          0.75


63      %


$          2.21


$          1.18


87      %

Diluted


$          1.15


$          0.73


58      %


$          2.09


$          1.16


80      %

 

 

CRITEO S.A.


Consolidated Statement of Cash Flows


(U.S. dollars in thousands, unaudited)






Three Months Ended





Twelve Months Ended






December 31,





December 31,






2021



2020


YoY
Change


2021


2020


YoY

Change

Net income


$

74,938



$

46,818


60

%


$

137,647


$

74,689


84

%

Non-cash and non-operating items



21,306




48,887


(56)

%



124,879



154,629


(19)

%

           - Amortization and provisions



23,015




26,960


(15)

%



90,934



106,591


(15)

%

           - Equity awards compensation expense (1)



12,354




6,305


96

%



44,528



28,770


55

%

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



(2,729)




(20)


NM




1,965



2,714


(28)

%

           - Change in deferred taxes



(23,210)




11,417


NM




(18,642)



3,720


NM


           - Change in income taxes



11,863




3,456


NM




6,043



10,867


(44)

%

           - Other



13




769


(98)

%



51



1,967


(97)

%

Changes in working capital related to operating activities



(30,232)




(51,625)


(41)

%



(41,613)



(43,962)


(5)

%

           - (Increase) / Decrease in trade receivables



(151,604)




(126,486)


20

%



(134,950)



(3,957)


NM


           - Increase / (Decrease) in trade payables



88,384




61,989


43

%



82,691



(33,314)


NM


           - (Increase) / Decrease in other current assets



(7,032)




(9,476)


(26)

%



(19,742)



(7,188)


NM


           - Increase / (Decrease) in other current liabilities



38,807




26,406


47

%



33,033



6,261


NM


           - Change in operating lease liabilities and right of use assets



1,213




(4,058)


NM




(2,645)



(5,764)


(54)

%

CASH FROM OPERATING ACTIVITIES



66,012




44,080


50

%



220,913



185,356


19

%

Acquisition of intangible assets, property, plant and equipment



(10,600)




(10,250)


3

%



(54,983)



(67,287)


(18)

%

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



455




(12,052)


NM




1,973



1,818


9

%

Payment for businesses, net of cash acquired



(892)




(1,173)


(24)

%



(10,419)



(1,176)


NM


Change in other non-current financial assets



865




(13,819)


NM




(12,938)



(34,448)


(62)


CASH USED FOR INVESTING ACTIVITIES



(10,172)




(37,294)


(73)

%



(76,367)



(101,093)


(24)

%

Proceeds from borrowings under line-of-credit agreement






(4,315)


NM






153,188


NM


Repayment of borrowings



13




(167,163)


NM




(1,249)



(167,344)


(99)

%

Proceeds from exercise of stock options



3,508




1,626


NM




25,196



1,727


NM


Repurchase of treasury stocks



(27,416)





NM




(100,027)



(43,655)


NM


Change in other financial liabilities



(401)




347


NM




(4,037)



(1,663)


NM


CASH USED FOR  FINANCING ACTIVITIES



(24,296)




(169,505)


(86)




(80,117)



(57,747)


39

%

Effect of exchange rates changes on cash and cash equivalents



(13,475)




23,986


NM




(36,913)



42,732


NM


Net increase in cash and cash equivalents



18,069




(138,733)


NM




27,516



69,248


(60)

%

Net cash and cash equivalents at beginning of period



497,458




626,744


(21)




488,011



418,763


17

%

Net cash and cash equivalents at end of period


$

515,527



$

488,011


6

%


$

515,527


$

488,011


6

%





















SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION




















Cash paid for taxes, net of refunds


$

(5,482)



$

(5,381)


2

%


$

(28,767)


$

(17,610)


63


Cash paid for interest


$

(347)



$

(1,336)


(74)

%


$

(1,486)


$

(2,155)


(31)



(1) Share-based compensation expense according to ASC 718 Compensation - stock compensation accounted for $11.9 million and $5.7 million of equity awards
compensation expense for the quarter ended December 31, 2021 and 2020, respectively, and $42.7 million and $27.1 million of equity awards compensation for the twelve
months ended December, 31, 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





Twelve Months Ended






December 31,





December 31,






2021


2020


YoY

Change


2021


2020


YoY

Change




















CASH FROM OPERATING ACTIVITIES


$

66,012


$

44,080


50

%


$

$ 220,913


$

185,356


19

%

Acquisition of intangible assets, property, plant and
equipment



(10,600)



(10,250)


3

%



(54,983)



(67,287)


(18)

%

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



455



(12,052)


NM




1,973



1,818


9

%

FREE CASH FLOW (1)


$

55,867


$

21,778


157

%


$

$ 167,903


$

119,887


40

%


(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








Twelve Months Ended








December 31,








December 31,








2021


2020


YoY
Change


YoY
Change at
Constant
Currency


2021


2020


YoY
Change


YoY
Change at
Constant
Currency


























Gross Profit



244,351



218,474


12

%


14

%



781,944



688,018


14

%


13

%


























Other Cost of Revenue



31,840



34,700


(8)

%


(6)

%



138,851



137,028


1

%


2

%


























Contribution ex-TAC (1)


$

276,191


$

253,174


9

%


11

%


$

920,795


$

825,046


12

%


11

%

 

 

(1) We define Contribution ex-TAC as our gross profit plus other costs of revenue generated over the applicable measurement period. 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 regarding the allocation of capital. 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. Our use of Contribution ex-TAC 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 Contribution 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 Contribution ex-TAC alongside our other U.S. GAAP financial result measures. The above table provides a reconciliation of Contribution ex-TAC to gross profit.

 

 


CRITEO S.A.


Segment Information


(U.S. dollars in thousands, unaudited)






Three Months Ended








Twelve Months Ended










December 31,








December 31,








Segment


2021


2020


YoY
Change


YoY
Change at
Constant
Currency


2021


2020


YoY
Change


YoY
Change at
Constant
Currency

Revenue


























Marketing Solutions


$

577,962


$

543,262


6

%


9

%


$

2,007,239


$

1,806,431


11

%


10

%


Retail Media (2)



75,305



118,020


(36)

%


(36)

%



246,996



266,186


(7)

%


(8)

%


Total



653,267



661,282


(1)

%


1

%



2,254,235



2,072,617


9

%


8

%



























Contribution ex-TAC


























Marketing Solutions



228,378



219,245


4

%


7

%



796,152



746,751


7

%


6

%


Retail Media (2)



47,813



33,929


41

%


41

%



124,643



78,295


59

%%


58

%


Total (1)


$

276,191


$

253,174


9

%


11

%


$

920,795


$

825,046


12

%


11

%

 

 

(1) We define Contribution ex-TAC as our gross profit plus other cost of sales generated over the applicable measurement period. 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 regarding the allocation of capital. 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. Our use of Contribution ex-TAC 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 Contribution 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 Contribution ex-TAC alongside our other U.S. GAAP financial result measures. The above table provides a reconciliation of Contribution ex-TAC to gross profit.


(2) Criteo operates as two reportable segments as of December 31, 2021. The table above presents the operating results of our Marketing Solutions and Retail Media segments.  A strategic building block of Criteo's Commerce Media Platform, the Retail Media Platform, introduced in June 2020, and reported under the retail media segment, 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 Contribution ex-TAC margin will increase. Contribution 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





Twelve Months Ended






December 31,





December 31,






2021


2020


YoY

Change


2021


2020


YoY

Change


Net income


$

74,938


$

46,818


60

%


$

137,647


$

74,689


84

%

Adjustments:



















Financial (Income) expense



(347)



111


NM




1,044



1,939


(46)

%

Provision for income taxes



(5,864)



20,254


NM




16,169



32,197


(50)

%

Equity awards compensation expense



12,114



8,960


35

%



44,955



31,425


43

%

Research and development



4,762



2,482


92

%



16,334



10,253


59

%

Sales and operations



3,143



3,662


(14)

%



13,023



12,042


8

%

General and administrative



4,209



2,816


49

%



15,598



9,130


71

%

Pension service costs



319



583


(45)

%



1,324



2,232


(41)

%

Research and development



166



290


(43)

%



686



1,114


(38)

%

Sales and operations



49



103


(52)

%



207



394


(47)

%

General and administrative



104



190


(45)

%



431



724


(40)

%

Depreciation and amortization expense



21,756



22,140


(2)

%



88,402



88,238


0.2

%

Cost of revenue (data center equipment)



14,611



15,354


(5)

%



61,119



55,935


9

%

Research and development



2,967



1,712


73

%



9,484



10,741


(12)

%

Sales and operations



3,579



4,033


(11)

%



14,780



16,770


(12)

%

General and administrative



599



1,041


(42)

%



3,019



4,792


(37)

%

Acquisition-related costs



6,118



174


NM




11,256



286


NM


General and administrative



6,118



174


NM




11,256



286


NM


Restructuring related and transformation (gain) costs (1)



1,833



4,383


(58)

%



21,698



19,989


9

%

Research and development



513



747


(31)

%



5,751



4,240


36

%

Sales and operations



568



2,605


(78)

%



9,380



9,398


(0.2)

%

General and administrative



752



1,031


(27)

%



6,567



6,351


3

%

Total net adjustments



35,929



56,605


(37)

%



184,848



176,306


5

%

Adjusted EBITDA (2)


$

110,867


$

103,423


7

%


$

322,495


$

250,995


28

%

 

(1) For the Three Months and the Twelve Months Ended December 2021, and December 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


Twelve Months Ended


December 31,


December 31,


2021


2020


2021


2020

(Gain) from forfeitures of share-based compensation awards

239


(2,655)


(427)


(2,655)

Facilities related (gain) costs

1,328


4,158


16,020


12,975

Payroll related (gain) costs

(157)


1,422


4,480


5,911

Consulting costs related to transformation

423


1,458


1,625


3,758

Total restructuring related and transformation (gain) costs

$                          1,833


$                          4,383


$                        21,698


$                        19,989

 

For the three months ended and the twelve months ended December 31, 2021 and December 31, 2020, respectively, the cash outflows related to restructuring related and
transformation costs were $12.4 million and $ 33.3 million, and $3.9 million and $16.9 million respectively, and were mainly comprised of payroll costs, broker and termination
penalties related to real-estate facilities and other consulting fees.

 

(2) 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





Twelve Months Ended






December 31,





December 31,






2021


2020


YoY
Change


2021


2020


YoY
Change

Research and Development expenses


$

(44,860)


$

(32,797)


37

%


$

(151,817)


$

(132,513)


15

%

Equity awards compensation expense



4,762



2,482


92

%



16,334



10,253


59

%

Depreciation and Amortization expense



2,967



1,712


73

%



9,484



10,741


(12)

%

Pension service costs



166



290


(43)

%



686



1,114


(38)

%

Restructuring related and transformation (gain) costs



513



747


(31)

%



5,751



4,240


36

%

Non GAAP - Research and Development expenses



(36,452)



(27,566)


32

%



(119,562)



(106,165)


13

%

Sales and Operations expenses



(89,892)



(85,871)


5

%



(325,616)



(330,285)


(1)

%

Equity awards compensation expense



3,143



3,662


(14)

%



13,023



12,042


8

%

Depreciation and Amortization expense



3,579



4,033


(11)

%



14,780



16,770


(12)

%

Pension service costs



49



103


(52)

%



207



394


(47)

%

Restructuring related and transformation (gain) costs



568



2,605


(78)

%



9,380



9,398


(0.2)

%

Non GAAP - Sales and Operations expenses



(82,553)



(75,468)


9

%



(288,226)



(291,681)


(1)

%

General and Administrative expenses



(43,855)



(32,623)


34

%



(152,634)



(116,395)


31

%

Equity awards compensation expense



4,209



2,816


49

%



15,598



9,130


71

%

Depreciation and Amortization expense



599



1,041


(42)

%



3,019



4,792


(37)

%

Pension service costs



104



190


(45)

%



431



724


(40)

%

Acquisition-related costs



6,118



174


NM




11,256



286


NM


Restructuring related and transformation (gain) costs



752



1,031


(27)

%



6,567



6,351


3

%

Non GAAP - General and Administrative expenses



(32,073)



(27,371)


17

%



(115,763)



(95,112)


22

%

Total Operating expenses



(178,607)



(151,291)


18.1

%



(630,067)



(579,193)


9

%

Equity awards compensation expense



12,114



8,960


35

%



44,955



31,425


43

%

Depreciation and Amortization expense



7,145



6,786


5

%



27,283



32,303


(16)

%

Pension service costs



319



583


(45)

%



1,324



2,232


(41)

%

Acquisition-related costs



6,118



174


NM




11,256



286


NM


Restructuring related and transformation (gain) costs



1,833



4,383


(58)

%



21,698



19,989


9

%

Total Non GAAP Operating expenses (1)


$

(151,078)


$

(130,405)


16

%


$

(523,551)


$

(492,958)


6

%

 

(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





Twelve Months Ended






December 31,





December 31,






2021


2020


YoY
Change



2021


2020


YoY
Change

Equity awards compensation expense



















Research and development


$

4,762


$

2,482


92

%


$

16,334


$

10,253


59

%

Sales and operations



3,143



3,662


(14)

%



13,023



12,042


8

%

General and administrative



4,209



2,816


49

%



15,598



9,130


71

%

Total equity awards compensation expense



12,114



8,960


35

%



44,955



31,425


43

%




















Pension service costs



















Research and development



166



290


(43)

%



686



1,114


(38)

%

Sales and operations



49



103


(52)

%



207



394


(47)

%

General and administrative



104



190


(45)

%



431



724


(40)

%

Total pension service costs



319



583


(45)

%



1,324



2,232


(41)

%




















Depreciation and amortization expense



















Cost of revenue (data center equipment)



14,611



15,354


(5)

%



61,119



55,935


9

%

Research and development



2,967



1,712


73

%



9,484



10,741


(12)

%

Sales and operations



3,579



4,033


(11)

%



14,780



16,770


(12)

%

General and administrative



599



1,041


(42)

%



3,019



4,792


(37)

%

Total depreciation and amortization expense



21,756



22,140


(2)

%



88,402



88,238


0.2

%




















Acquisition-related costs



















General and administrative



6,118



174


NM




11,256



286


NM


Total acquisition-related costs



6,118



174


NM




11,256



286


NM





















Restructuring related and transformation (gain) costs



















Research and development



513



747


(31)

%



5,751



4,240


36

%

Sales and operations



568



2,605


(78)

%



9,380



9,398


(0.2)

%

General and administrative



752



1,031


(27)

%



6,567



6,351


3

%

Total restructuring related and transformation (gain) costs


$

1,833


$

4,383


(58)

%


$

21,698


$

19,989


9

%

 

 

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





Twelve Months Ended






December 31,





December 31,






2021


2020


YoY
Change


2021


2020


YoY
Change




















Net income


$

74,938


$

46,818


60

%


$

137,647


$

74,689


84

%

Adjustments:



















Equity awards compensation expense



12,114



8,960


35

%



44,955



31,425


43

%

Amortization of acquisition-related intangible assets



3,755



2,926


28

%



12,929



15,520


(17)

%

Acquisition-related costs



6,118



174


NM




11,256



286


NM


Restructuring related and transformation (gain) costs



1,833



4,383


(58)

%



21,698



19,989


9

%

Tax impact of the above adjustments (1)



(6,557)



(2,127)


NM




(11,243)



(7,738)


45

%

Total net adjustments



17,263



14,316


21

%



79,595



59,482


34

%

Adjusted net income (2)


$

92,201


$

61,134


51

%


$

217,242


$

134,171


62

%




















Weighted average shares outstanding



















 - Basic



60,590,826



60,336,486






60,717,446



60,876,480




 - Diluted



63,985,850



62,348,489






64,231,637



61,818,593























Adjusted net income per share



















 - Basic


$

1.52


$

1.01


50

%


$

3.58


$

2.20


63

%

 - Diluted


$

1.44


$

0.98


47

%


$

3.38


$

2.17


56

%

 

(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) 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





Twelve Months Ended







December 31,





December 31,






2021


2020


YoY
Change


2021


2020



YoY

Change
























Revenue as reported


$

653,267



$

661,282



(1)

%


$

2,254,235



$

2,072,617



9

%

Conversion impact U.S. dollar/other currencies



14,553










(19,713)








Revenue at constant currency(1)



667,820




661,282



1

%



2,234,522




2,072,61



8

%
























Traffic acquisition costs as reported



(377,076)




(408,108)



(8)

%



(1,333,440)




(1,247,571)



7

%

Conversion impact U.S. dollar/other currencies



(8,567)










12,263








Traffic Acquisition Costs at constant currency(1)



(385,643)




(408,108)



(6)

%



(1,321,177)




(1,247,571)



6

%
























Contribution ex-TAC as reported(2)



276,191




253,174



9

%



920,795




825,046



12


Conversion impact U.S. dollar/other currencies



5,986










(7,450)








Contribution ex-TAC at constant currency(2)



282,177




253,174



11

%



913,345




825,046



11

%

Contribution ex-TAC(2)/Revenue as reported



42

%



38

%






41

%



40

%



























Other cost of revenue as reported



(31,840)




(34,700)



(8)

%



(138,851)




(137,028)



1

%

Conversion impact U.S. dollar/other currencies



(919)










(372)








Other cost of revenue at constant currency(1)



(32,759)




(34,700)



(6)

%



(139,223)




(137,028)



2

%
























Gross Profit as reported



244,351




218,474



12

%



781,944




688,018



14

%

Conversion impact U.S. dollar/other currencies



5,067










(7,822)








Gross Profit at constant currency(1)



249,418




218,474



14

%



774,122




688,018



13

%
























Adjusted EBITDA(3)



110,867




103,423



7

%



322,495




250,995



28

%

Conversion impact U.S. dollar/other currencies



2,423










(7,281)








Adjusted EBITDA(3) at constant currency(1)


$

113,290



$

103,423



10

%


$

315,214



$

250,995



26

%

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



40

%



41

%






35

%



30

%




 

(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) Contribution ex-TAC is not a measure calculated in accordance with U.S. GAAP. See the table entitled "Reconciliation of Contribution ex-TAC to Gross Profit" for a reconciliation of Contribution ex-TAC to gross profit.


(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)




Twelve 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


77,876


(1,417,028)

Basic number of shares - Basic EPS basis


60,717,446


60,876,480

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


3,514,191


942,113

Diluted number of shares - Diluted EPS basis


64,231,637


61,818,593






Shares issued as December 31, before Treasury stocks


65,883,347


66,272,106

Treasury stock as of December 31,


(5,207,873)


(5,632,536)

Shares outstanding as of December 31, after Treasury stocks


60,675,474


60,639,570

Total dilutive effect of share options, warrants, employee warrants


6,213,932


7,400,024

Fully diluted shares as at December 31,


66,889,406


68,039,594

 

 

 

CRITEO S.A.

Supplemental Financial Information and Operating Metrics

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



YoY

Change

QoQ
Change

Q4

2021

Q3

2021

Q2

2021

Q1

2021

Q4

2020

Q3

2020

Q2

2020

Q1

2020

Q4

2019













Clients

1%

—%

21,745

21,747

21,332

20,626

21,460

20,565

20,359

20,360

20,247













Revenue 

(1)%

28%

653,267

508,580

551,311

541,077

661,282

470,345

437,614

503,376

652,640

Americas

(8)%

41%

287,270

204,428

221,227

203,900

312,817

204,618

185,674

191,745

306,250

EMEA

1%

25%

234,559

188,354

209,303

212,096

232,137

167,800

159,621

190,114

216,639

APAC

13%

14%

131,438

115,798

120,781

125,081

116,328

97,927

92,319

121,517

129,751













Revenue

(1)%

28%

653,267

508,580

551,311

541,077

661,282

470,345

437,614

503,376

652,640

Marketing Solutions

6%

26%

577,962

458,622

487,465

483,190

543,262

412,126

381,270

469,773

574,783

Retail Media (2)

(36)%

51%

75,305

49,958

63,846

57,887

118,020

58,219

56,344

33,603

77,857













TAC

(8)%

27%

(377,076)

(297,619)

(331,078)

(327,667)

(408,108)

(284,401)

(257,698)

(297,364)

(386,388)

Marketing Solutions

8%

26%

(349,584)

(276,498)

(294,132)

(290,873)

(324,017)

(243,616)

(218,990)

(273,057)

(331,709)

Retail Media (2)

(67)%

30%

(27,492)

(21,121)

(36,946)

(36,794)

(84,091)

(40,785)

(38,708)

(24,307)

(54,679)













Contribution ex-TAC (1)

9%

31%

276,191

210,961

220,233

213,410

253,174

185,944

179,916

206,012

266,252

Marketing Solutions

4%

25%

228,378

182,124

193,333

192,317

219,245

168,510

162,280

196,716

243,074

Retail Media (2)

41%

66%

47,813

28,837

26,900

21,093

33,929

17,434

17,636

9,296

23,178













Cash flow from operating activities 

50%

29%

66,012

51,179

26,360

77,362

44,080

51,156

33,377

56,743

59,359













Capital expenditures

(55)%

(36)%

10,145

15,957

13,128

13,780

22,302

12,898

18,532

11,737

17,520













Capital expenditures/Revenue

(1)ppt

(1)ppt

2%

3%

2%

3%

3%

3%

4%

2%

3%













Net cash position

6%

4%

515,527

497,458

489,521

520,060

488,011

626,744

578,181

436,506

418,763













Headcount

7%

5%

2,781

2,658

2,572

2,532

2,594

2,636

2,685

2,701

2,755













Days Sales Outstanding (days - end of month)

9 days

(5) days

65

70

66

64

56

62

61

62

52

 

(1)  We define Contribution ex-TAC as our gross profit plus other costs of revenue generated over the applicable measurement period. 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 regarding the allocation of capital. 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. Our use of Contribution ex-TAC 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 Contribution 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 Contribution ex-TAC alongside our other U.S. GAAP financial result measures.


(2) Criteo operates as two reportable segments as of December 31, 2021. The table above presents the operating results of our Marketing Solutions and Retail Media segments.  A strategic building block of Criteo's Commerce Media Platform, the Retail Media Platform, introduced in June 2020, and reported under the retail media segment, 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 Contribution ex-TAC margin will increase. Contribution ex-TAC will not be impacted by this transition.

 

 

Cision View original content:https://www.prnewswire.com/news-releases/criteo-reports-strong-fourth-quarter-and-fiscal-year-2021-results-301478420.html

SOURCE Criteo S.A.

Copyright 2022 PR Newswire

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