Completed the Acquisition of IPONWEB, a Market-Leading AdTech Platform Company
Raises 2022 Contribution ex-TAC Guidance with IPONWEB Acquisition
Announces Investor Day on September 26, 2022

NEW YORK, Aug. 3, 2022 /PRNewswire/ -- Criteo S.A. (NASDAQ: CRTO) ("Criteo" or the "Company"), the commerce media company, today announced the completion of its acquisition of IPONWEB and financial results for the three and six months ended June 30, 2022.

Completion of the Acquisition of IPONWEB

Criteo completed the acquisition of IPONWEB, a market-leading AdTech platform company with world-class media trading capabilities, on August 1, 2022.

With this strategic acquisition, Criteo accelerates its Commerce Media Platform strategy to better serve its enterprise marketers – and their agency partners – by leveraging IPONWEB's well-established Demand Side Platform (DSP) and Supply Side Platform (SSP) solutions. This acquisition also expands monetization opportunities for all media owners, including retailers, and provides critical capabilities for first-party data management across the ecosystem.

On December 9, 2021, Criteo announced that it had entered into exclusive negotiations to acquire IPONWEB for $380 million, made up of $305 million in cash and $75 million in treasury shares. In accordance with the revised terms of the transaction, Criteo acquired IPONWEB for $250 million, subject to customary purchase price adjustments, made up of approximately $180 million paid in cash and approximately $70 million paid in Criteo treasury shares at closing, plus potential earnout consideration of up to $100 million to be paid in cash over the next eighteen months subject to certain financial and other performance milestones. The restructured transaction also excludes IPONWEB's subsidiary in Russia.

Second Quarter 2022 Financial Highlights:

The following table summarizes our consolidated financial results for the three and six months ended June 30, 2022:


Three Months Ended

Six Months Ended


June 30,

June 30,


2022


2021


YoY
Change

2022


2021


YoY
Change


(in millions, except EPS data)

GAAP Results











Revenue

$              495


$            551


(10) %

$   1,006


$  1,092


(8) %

Gross Profit

$              185


$            183


1 %

$      369


$     362


2 %

Net Income

$                18


$              15


18 %

$        39


$       38


1 %

Gross Profit margin

37 %


33 %


4ppt

37 %


33 %


4ppt

Diluted EPS

$             0.27


$           0.23


17 %

$     0.60


$    0.58


3 %

Cash from operating activities

$                14


$              26


(47) %

$        89


$     104


(14) %

Cash and cash equivalents

$              563


$            490


15 %

$      563


$     490


15 %












Non-GAAP Results1











Contribution ex-TAC

$              215


$            220


(3) %

$      431


$     434


(1) %

Contribution ex-TAC margin

43 %


40 %


3ppt

43 %


40 %


3ppt

Adjusted EBITDA

$                50


$              67


(26) %

$      113


$     143


(21) %

Adjusted diluted EPS

$             0.58


$           0.63


(8) %

$     1.11


$    1.31


(15) %

Free Cash Flow (FCF)

$                 (1)


$              13


(111) %

$        68


$       77


(12) %

FCF / Adjusted EBITDA

(3) %


20 %


(23)ppt

60 %


54 %


6ppt










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.

"Our second quarter performance demonstrates our team's strong execution and the value we bring to our clients," said Megan Clarken, Chief Executive Officer of Criteo. "We are thrilled to welcome IPONWEB to Criteo. Together with IPONWEB, we expect to have significant scale and differentiated first-party data capabilities to meet the fast-growing demand for Commerce and Retail Media solutions on the open internet."

Operating Highlights

  • On August 1st, we completed the acquisition of IPONWEB for $250 million, including approximately $180 million paid in cash and approximately $70 million paid in Criteo treasury shares at closing, plus potential earnout consideration of up to $100 million.
  • Retail Media Contribution ex-TAC grew 42% year-over-year at constant currency2, and same-retailer Contribution ex-TAC3 for Retail Media increased 37% year-over-year.
  • Marketing Solutions Contribution ex-TAC grew 2% year-over-year at constant currency2.
  • We expanded our platform adoption with large retailers and marketplaces, including Bloomingdale's, Deliveroo and Lowe's Canada.
  • We rolled out our API Partner Program in EMEA and added ChannelAdvisor as an API Partner in the U.S.
  • The French Competition Authority issued a favorable decision that will restore Criteo's partner status and partner access to Meta ad inventory globally.
  • Criteo's activated media spend4 by the Commerce Media Platform for marketers and media owners was over $2.8 billion in the last 12 months and $676 million in Q2, growing 9% at constant currency2.
  • We had 725 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 commerce media network.
  • In July 2022, we signed a mandate letter and term sheet, subject to customary conditions, for an expanded €407 million ($418 million) revolving credit facility.

Financial Summary

Revenue for Q2 2022 was $495 million, gross profit was $185 million and Contribution ex-TAC was $215 million. Net income for Q2 was $18 million, or $0.27 per share on a diluted basis. Adjusted EBITDA for Q2 was $50 million, resulting in an adjusted diluted EPS of $0.58. As reported, Revenue for Q2 decreased by 10%, gross profit increased 1% and Contribution ex-TAC decreased by 3%. At constant currency, Revenue for Q2 decreased by 3% and Contribution ex-TAC increased by 7%. Cash flow from operating activities was $14 million and Free Cash Flow was $(1) million in Q2. As of June 30, 2022, we had $573 million in cash and marketable securities on our balance sheet.

Sarah Glickman, Chief Financial Officer, said, "Strong growth in our Retail Media and Audience Targeting solutions, and resilient performance in our retargeting solutions delivered 7% growth in Contribution ex-TAC at constant currency, despite a slower macro environment and the suspension of our Russia operations. We are on pace to deliver sustainable and profitable growth in 2022 and we remain confident in our long-term growth outlook. With our strategic acquisition of IPONWEB and our share buyback program, we are deploying our capital to accelerate growth and drive near- and long-term shareholder value."

Second Quarter 2022 Results

Revenue, Gross Profit and Contribution ex-TAC

Revenue decreased by 10% year-over-year in Q2 2022, or 3% at constant currency, to $495 million (Q2 2021: $551 million). Gross profit increased by 1% year-over-year in Q2 2022 to $203 million (Q2 2021: $183 million). Gross profit as a percentage of revenue, or gross profit margin, was 37% (Q2 2021: 33%). Contribution ex-TAC in the second quarter decreased 3% year-over-year, or increased 7% at constant currency, to $215 million (Q2 2021: $220 million). Contribution ex-TAC as a percentage of revenue, or Contribution ex-TAC margin, was 43% (Q2 2021: 40%), up 300 basis points year-over-year, largely driven by Retail Media and the acceleration of our client transition to the Company's platform.

  • Marketing Solutions revenue decreased 10%, or decreased 2% at constant currency, and Marketing Solutions Contribution ex-TAC decreased 8%, or increased 2% at constant currency, driven by healthy demand from Retail clients and a rebound in Travel, partially offset by anticipated identity and privacy changes and the suspension of the Company's operations in Russia.
  • Retail Media revenue decreased 14%, or 12% at constant currency, reflecting the impact related to the ongoing client migration to the Company's platform. Retail Media Contribution ex-TAC increased 36%, or 42% at constant currency, driven by continued strength in Retail Media onsite, new client integrations and growing network effects of the platform.

 










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 prior year monthly exchange rates to transactions denominated in settlement or billing currencies other than the US dollar.

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 are 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.

Net Income and Adjusted Net Income

Net income was $18 million in Q2 2022 (Q2 2021: $15 million). Net income margin as a percentage of revenue was 4% (Q2 2021: 3%). Net income available to shareholders of Criteo was $17 million, or $0.27 per share on a diluted basis (Q2 2021: $15 million, or $0.23 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 $36 million, or $0.58 per share on a diluted basis (Q2 2021: $41 million, or $0.63 per share on a diluted basis).

Adjusted EBITDA and Operating Expenses

Adjusted EBITDA was $50 million, in line with the Company's guidance, representing a decrease of 26% year-over-year (Q2 2021: $67 million). This was driven by planned growth investments, including investments in our people and marketing events, partially offset by higher Contribution ex-TAC over the period. Adjusted EBITDA as a percentage of Contribution ex-TAC, or Adjusted EBITDA margin, was 23% (Q2 2021: 31%).

Operating expenses increased 8% year-over-year to $176 million (Q2 2021: $163 million), mostly driven by higher headcount-related expense, including equity awards compensation expense, balanced with effective cost 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 13% or $17 million, to $148 million (Q2 2021: $131 million).

Cash Flow, Cash and Financial Liquidity Position

Cash flow from operating activities decreased 47% year-over-year to $14 million in Q2 2022 (Q2 2021: $26 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 to $(1) million in Q2 2022 (Q2 2021: $13 million).

Cash and cash equivalents increased $47 million compared to December 31, 2021 to $563 million, after spending approximately $21 million on share repurchases in the second quarter of 2022.

As of June 30, 2022, the Company had total financial liquidity of approximately $1 billion, including its cash position, marketable securities, Revolving Credit Facility and treasury shares reserved for M&A.

2022 Business Outlook

The following forward-looking statements reflect Criteo's expectations as of August 3, 2022.

Third quarter 2022 guidance:

  • We expect Contribution ex-TAC between $223 million and $229 million, or year-over-year growth at constant-currency of +12% to +15%, including the contribution from our IPONWEB acquisition.
  • We expect Adjusted EBITDA between $48 million and $53 million.

Fiscal year 2022 guidance:

  • We now expect Contribution ex-TAC to grow by 11% to 14% at constant currency, including the contribution from our IPONWEB acquisition.
  • We now to expect an Adjusted EBITDA margin of approximately 30% to 31% of Contribution ex-TAC and a Free Cash Flow conversion rate of about 45% of Adjusted EBITDA.

The above guidance for the third 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 0.943, a U.S. dollar-Japanese Yen rate of 127, a U.S. dollar-British pound rate of 0.797, a U.S. dollar-Korean Won rate of 1,190 and a U.S. dollar-Brazilian real rate of 5.30.

The above guidance assumes that no additional acquisitions are completed during the third 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 are not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures; in particular, the measures and effects of equity awards compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our share price. The variability of the above charges could potentially have a significant impact on our future U.S. GAAP financial results.

New Revolving Credit Facility

Criteo signed a mandate letter and term sheet, subject to customary conditions, for an expanded €407 million ($418 million), five-year revolving credit facility, which would replace the Company's prior €294 million ($305 million) facility. The mandate letter and term sheet were signed on July 29, 2022 and the Company expects to enter into a definitive agreement in the third quarter. The increased borrowing capacity reflects Criteo's financial strength and growth outlook.

Investor Day

Criteo also announced today that it will host an Investor Day in New York City on September 26, 2022. The Investor Day will be an opportunity for the Company to provide an update on its mid-term financial outlook.

Update to Constant Currency Calculation Methodology

Beginning in the second quarter of 2022, the Company updated its methodology for calculating results on a constant currency basis, which are non-GAAP measures. The Company will use the prior year's monthly exchange rates where the settlement or billing currencies are in currencies other than US dollars. The Q1 2022 constant currency results have been revised consistent with this updated methodology.

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 revenue and reconciled to gross profit through the exclusion of other costs of revenue. Contribution ex-TAC is not a measure calculated in accordance with U.S. GAAP. We have included Contribution ex-TAC because it is a key measure used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions. In particular, we believe that this measure can provide useful measures for period-to-period comparisons of our business.

Accordingly, we believe that Contribution ex-TAC provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors.

Adjusted EBITDA is our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity awards compensation expense, pension service costs 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, depreciation and amortization expense, acquisition-related 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, Adjusted EBITDA to net income, Adjusted Net Income to net income, Free Cash Flow to cash flow from operating activities, and Non-GAAP Operating Expenses to operating expenses, in each case, the most comparable U.S. GAAP measure. Our use of non-GAAP financial measures has limitations as an analytical tool, and you should not consider such non-GAAP measures in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: 1) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; and 2) other companies may report  Contribution ex-TAC, Contribution ex-TAC margin, Adjusted EBITDA, Adjusted Net Income, Free Cash Flow, Non-GAAP Operating Expenses or similarly titled measures but calculate them differently or over different regions, which reduces their usefulness as comparative measures. Because of these and other limitations, you should consider these measures alongside our U.S. GAAP financial results, including revenue and net income.

Forward-Looking Statements Disclosure

This press release contains forward-looking statements, including projected financial results for the quarter ending September 30, 2022 and the year ending 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 integration 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 the invasion of Ukraine by Russia, including resulting sanctions, 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 25, 2022, 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, and inflation and rising interest rates in the U.S. could have, an impact on Criteo's business, financial condition, cash flow and results of operations. There are 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, August 3, 2022, at 8:00 AM ET, 2:00 PM CET. The conference call will be webcast live on the Company's website at https://criteo.investorroom.com/ and will subsequently be available for replay.

United States:

+1 855 209 8212

International:

+1 412 317 0788

France

080-510-2319

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

About Criteo

Criteo (NASDAQ: CRTO) is the global commerce media company that enables marketers and media owners to drive better commerce outcomes. Its industry leading Commerce Media Platform connects 22,000 marketers and thousands of media owners to deliver richer consumer experiences from product discovery to purchase. By powering trusted and impactful advertising, Criteo supports an open internet that encourages discovery, innovation, and choice. For more information, please visit www.criteo.com.

Contacts

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

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

Financial information to follow

 

CRITEO S.A.
Consolidated Statement of Financial Position
(U.S. dollars in thousands, unaudited)




June 30, 2022


December 31, 2021

Assets





Current assets:





Cash and cash equivalents


$                         562,546


$                         515,527

 Trade receivables, net of allowances of $50.5 million and $45.4 million at June 30, 2022 and December 31, 2021, respectively 


490,643


581,988

Income taxes


19,888


8,784

Other taxes


68,608


73,388

Other current assets


39,240


34,182

Marketable securities - current portion


10,000


50,299

Total current assets


1,190,925


1,264,168

Property, plant and equipment, net


124,133


139,961

Intangible assets, net


78,018


82,627

Goodwill


322,972


329,699

Right of Use Asset - operating lease


108,563


120,257

Marketable securities - non current portion



5,000

Non-current financial assets


4,908


6,436

Deferred tax assets


26,288


35,443

    Total non-current assets


664,882


719,423

Total assets


$                     1,855,807


$                     1,983,591






Liabilities and shareholders' equity





Current liabilities:





Trade payables


$                         400,058


$                         430,245

Contingencies


2,410


3,059

Income taxes


3,791


6,641

Financial liabilities - current portion


255


642

Lease liability - operating - current portion


32,110


34,066

Other taxes


50,589


60,236

Employee - related payables


70,435


98,136

Other current liabilities


44,390


39,523

Total current liabilities


604,038


672,548

Deferred tax liabilities


2,907


3,053

Defined benefit plans


3,213


5,531

Financial liabilities - non current portion


334


360

Lease liability - operating - non current portion


82,984


93,893

Other non-current liabilities


4,859


9,886

    Total non-current liabilities


94,297


112,723

Total liabilities


698,335


785,271

Commitments and contingencies





Shareholders' equity:





Common shares, €0.025 par value, 65,794,032 and 65,883,347  shares authorized, issued and outstanding at June 30, 2022 and December 31, 2021, respectively.


2,147


2,149

Treasury stock, 5,265,393 and  5,207,873 shares at cost as of June 30, 2022 and December 31, 2021, respectively.


(148,509)


(131,560)

Additional paid-in capital


750,774


731,248

Accumulated other comprehensive income (loss)


(106,293)


(40,294)

Retained earnings


628,198


601,588

Equity - attributable to shareholders of Criteo S.A.


1,126,317


1,163,131

Non-controlling interests


31,155


35,189

Total equity


1,157,472


1,198,320

Total equity and liabilities


$                     1,855,807


$                     1,983,591

 

CRITEO S.A.
Consolidated Statement of Income
(U.S. dollars in thousands, except share and per share data, unaudited)




Three Months Ended




Six Months Ended





June 30,




June 30,





2022


2021


YoY

Change


2022


2021


YoY

Change














Revenue


$    495,090


$    551,311


(10) %


$ 1,005,657


$ 1,092,388


(8) %














Cost of revenue













Traffic acquisition cost


(280,565)


(331,078)


(15) %


(574,215)


(658,745)


(13) %

Other cost of revenue


(29,550)


(37,364)


(21) %


(62,443)


(72,076)


(13) %














Gross profit


184,975


182,869


1 %


368,999


361,567


2 %














Operating expenses:













Research and development expenses


(41,496)


(41,915)


(1) %


(75,523)


(73,612)


3 %

Sales and operations expenses


(99,313)


(80,751)


23 %


(188,312)


(160,105)


18 %

General and administrative expenses


(34,988)


(40,474)


(14) %


(68,324)


(73,902)


(8) %

Total Operating expenses


(175,797)


(163,140)


8 %


(332,159)


(307,619)


8 %

Income from operations


9,178


19,729


(53) %


36,840


53,948


(32) %

Financial and Other income (expense)


16,412


(519)


NM


20,442


(1,237)


NM

Income before taxes


25,590


19,210


33 %


57,282


52,711


9 %

Provision for income taxes


(7,916)


(4,181)


89 %


(18,330)


(14,232)


29 %

Net Income


$       17,674


$       15,029


18 %


$       38,952


$       38,479


1 %














Net income available to shareholders of Criteo S.A.


$       17,033


$       14,804


15 %


$       37,620


$       37,210


1 %

Net income available to non-controlling interests


$            641


$            225


NM


$         1,332


$         1,269


5 %














Weighted average shares outstanding used in computing per share amounts:













Basic


60,240,344


60,663,301




60,488,429


60,702,780



Diluted


62,303,670


64,665,212




62,957,718


64,371,603
















Net income allocated to shareholders per share:













Basic


$           0.28


$           0.24


17 %


$           0.62


$           0.61


2 %

Diluted


$           0.27


$           0.23


17 %


$           0.60


$           0.58


3 %

 

CRITEO S.A.
Consolidated Statement of Cash Flows
(U.S. dollars in thousands, unaudited)




Three Months Ended




Six Months Ended





June 30,




June 30,





2022


2021


YoY

Change


2022


2021


YoY

Change

Net income


$         17,674


$         15,029


18 %


$  38,952


$  38,479


1 %

Non-cash and non-operating items


12,854


35,888


(64) %


47,580


65,905


(28) %

           - Amortization and provisions


22,207


25,161


(12) %


48,818


42,386


15 %

           - Equity awards compensation expense (1)


12,021


11,670


3 %


21,510


18,885


14 %

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


(705)


14


NM


(696)


3,959


NM

           - Change in deferred taxes


5,055


(2,693)


NM


7,923


2,305


NM

           - Change in income taxes


(14,246)


1,724


NM


(14,678)


(1,655)


NM

           - Other


(11,478)


12


NM


(15,297)


25


NM

Changes in working capital related to operating activities


(16,556)


(24,557)


(33) %


2,370


(662)


NM

           - (Increase) / Decrease in trade receivables


(27,262)


(21,031)


30 %


65,476


26,195


NM

           - Increase / (Decrease) in trade payables


32,695


(9,266)


NM


(16,977)


(19,906)


(15) %

           - (Increase) / Decrease in other current assets


4,352


(137)


NM


(14,595)


(5,187)


NM

           - Increase / (Decrease) in other current liabilities


(28,131)


3,458


NM


(31,313)


(1,069)


NM

           - Change in operating lease liabilities and right of use assets


1,790


2,419


(26) %


(221)


(695)


(68) %

CASH FROM OPERATING ACTIVITIES


13,972


26,360


(47) %


88,902


103,722


(14) %

Acquisition of intangible assets, property, plant and equipment


(21,937)


(15,663)


40 %


(32,794)


(27,616)


19 %

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


6,485


2,535


NM


11,778


708


NM

Payment for businesses, net of cash acquired



(9,598)


NM



(9,598)


NM

Change in other non-current financial assets


21,822


(17,056)


NM


44,311


(20,308)


NM

CASH USED FOR (FROM) INVESTING ACTIVITIES


6,370


(39,782)


NM


23,295


(56,814)


NM

Proceeds from borrowings under line-of-credit agreement




NM


78,513



NM

Repayment of borrowings



(1,090)


NM


(78,513)


(1,272)


NM

Proceeds from exercise of stock options


80


7,501


(99) %


351


9,575


(96) %

Repurchase of treasury stocks


(21,030)


(29,999)


(30) %


(29,334)


(34,929)


(16) %

Change in other financial liabilities


7,808


(370)


NM


14,474


(748)


NM

CASH USED FOR FINANCING ACTIVITIES


(13,142)


(23,958)


(45) %


(14,509)


(27,374)


(47) %

Effect of exchange rates changes on cash and cash equivalents


(33,996)


6,841


NM


(50,669)


(18,024)


NM

Net increase in cash and cash equivalents


(26,796)


(30,539)


(12) %


47,019


1,510


NM

Net cash and cash equivalents at beginning of period


589,342


520,060


13 %


515,527


488,011


6 %

Net cash and cash equivalents at end of period


$       562,546


$       489,521


15 %


$  562,546


$  489,521


15 %














SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION













Cash paid for taxes, net of refunds


$        (17,107)


$          (5,150)


232 %


$ (25,085)


$ (13,582)


85 %

Cash paid for interest


$             (261)


$             (369)


(29) %


$       (626)


$       (736)


(15) %


(1) Share-based compensation expense according to ASC 718 Compensation - stock compensation accounted for $11.5 million and $11.2 million of equity awards compensation expense for the quarter ended June 30, 2022 and 2021, respectively, and $20.6 million and $18.0 million of equity awards compensation for the six months ended June, 30, 2022 and 2021, respectively.

 

CRITEO S.A.
Reconciliation of Cash from Operating Activities to Free Cash Flow
(U.S. dollars in thousands, unaudited)




Three Months Ended




Six Months Ended





June 30,




June 30,





2022


2021


YoY

Change


2022


2021


YoY

Change














CASH FROM OPERATING ACTIVITIES


$    13,972


$    26,360


(47) %


$      88,902


$   103,722


(14) %

Acquisition of intangible assets, property, plant and equipment


(21,937)


(15,663)


40 %


(32,794)


(27,616)


19 %

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


6,485


2,535


NM


11,778


708


NM

FREE CASH FLOW (1)


$     (1,480)


$    13,232


(111) %


$      67,886


$      76,814


(12) %


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

 

CRITEO S.A.
Reconciliation of Contribution ex-TAC to Gross Profit
(U.S. dollars in thousands, unaudited)



Three Months Ended




Six Months Ended



June 30,




June 30,



2022


2021


YoY
Change


2022


2021


YoY
Change













Gross Profit

184,975


182,869


1 %


368,999


361,567


2 %













Other Cost of Revenue

29,550


37,364


(21) %


62,443


72,076


(13) %













Contribution ex-TAC (1)

$   214,525


$   220,233


(3) %


$      431,442


$      433,643


(1) %


(1) We define Contribution ex-TAC as a profitability measure akin to gross profit. It is calculated by deducting traffic acquisition costs from revenue and reconciled to gross profit through the exclusion of other 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. 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






Six Months Ended








June 30,






June 30,






Segment


2022


2021


YoY
Change


YoY
Change at
Constant
Currency (3)


2022


2021


YoY
Change


YoY
Change at
Constant
Currency

Revenue


















Marketing Solutions


$      440,423


$      487,465


(10) %


(2) %


$      904,311


$      970,655


(7) %


(0.5) %


Retail Media (2)


54,667


63,846


(14) %


(12) %


101,346


121,733


(17) %


(15) %


Total


495,090


551,311


(10) %


(3) %


1,005,657


1,092,388


(8) %


(2) %



















Contribution ex-TAC


















Marketing Solutions


177,969


193,333


(8) %


2 %


364,057


385,650


(6) %


3 %


Retail Media (2)


36,556


26,900


36 %


42 %


67,385


47,993


40 %


45 %


Total (1)


$      214,525


$      220,233


(3) %


7 %


$      431,442


$      433,643


(1) %


8 %


(1) We define Contribution ex-TAC as a profitability measure akin to gross profit. It is calculated by deducting traffic acquisition costs from revenue and reconciled to gross profit through the exclusion of other 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. 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 is expected to increase. Contribution ex-TAC is not impacted by this transition.


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

 

CRITEO S.A.
Reconciliation of Adjusted EBITDA to Net Income
(U.S. dollars in thousands, unaudited)




Three Months Ended




Six Months Ended





June 30,




June 30,





2022


2021


YoY

Change


2022


2021


YoY

Change

Net income


$   17,674


$   15,029


18 %


$   38,952


$   38,479


1 %

Adjustments:













Financial (Income) expense


(15,924)


519


NM


(19,954)


1,237


NM

Provision for income taxes


7,916


4,181


89 %


18,330


14,232


29 %

Equity awards compensation expense


12,020


11,669


3 %


21,510


19,551


10 %

Research and development


5,578


4,218


32 %


9,545


6,714


42 %

Sales and operations


2,550


3,636


(30) %


5,118


6,005


(15) %

General and administrative


3,892


3,815


2 %


6,847


6,832


— %

Pension service costs


264


337


(22) %


539


675


(20) %

Research and development


136


175


(22) %


278


350


(21) %

Sales and operations


39


53


(26) %


79


106


(25) %

General and administrative


89


109


(18) %


182


219


(17) %

Depreciation and amortization expense


20,141


22,491


(10) %


42,285


44,345


(5) %

Cost of revenue (data center equipment)


12,625


15,744


(20) %


27,257


30,988


(12) %

Research and development


3,181


2,207


44 %


6,474


3,960


63 %

Sales and operations


3,729


3,702


1 %


7,338


7,656


(4) %

General and administrative


606


838


(28) %


1,216


1,741


(30) %

Acquisition-related costs


1,977


3,047


(35) %


4,521


3,047


48 %

Sales and operations


178



NM


178



NM

General and administrative


1,799


3,047


(41) %


4,343


3,047


43 %

Restructuring related and transformation (gain) costs (1)


5,925


9,996


(41) %


6,635


21,632


(69) %

Cost of revenue




NM




NM

Research and development


1,029


4,831


(79) %


1,038


6,267


(83) %

Sales and operations


4,076


1,551


NM


4,532


8,918


(49) %

General and administrative


820


3,614


(77) %


1,065


6,447


(83) %

Total net adjustments


32,319


52,240


(38) %


73,866


104,719


(29) %

Adjusted EBITDA (2)


$   49,993


$   67,269


(26) %


$ 112,818


$ 143,198


(21) %


(1) For the three months and the six months ended June 2022, and June 2021, 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


Six Months Ended


June 30,


June 30,


2022


2021


2022


2021

(Gain) from forfeitures of share-based compensation awards




(666)

Facilities related (gain) costs

753


9,721


1,286


16,337

Payroll related (gain) costs

4,992


(181)


4,992


4,971

Consulting costs related to transformation

180


456


357


990

Total restructuring related and transformation (gain) costs

$                     5,925


$                     9,996


$                     6,635


$                   21,632


For the three months ended and the six months ended June 30, 2022 and June 30, 2021, respectively, the cash outflows related to restructuring related and transformation costs were $2.3 million, and $10.3 million and $3.1 million, and $16.5 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, depreciation and amortization expense 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




Six Months Ended





June 30,




June 30,





2022


2021


YoY
Change


2022


2021


YoY
Change

Research and Development expenses


$      (41,496)


$      (41,915)


(1) %


$      (75,523)


$      (73,612)


3 %

Equity awards compensation expense


5,578


4,218


32 %


9,545


6,714


42 %

Depreciation and Amortization expense


3,181


2,207


44 %


6,474


3,960


63 %

Pension service costs


136


175


(22) %


278


350


(21) %

Restructuring related and transformation (gain) costs


1,029


4,831


(79) %


1,038


6,267


(83) %

Non GAAP - Research and Development expenses


(31,572)


(30,484)


4 %


(58,188)


(56,321)


3 %

Sales and Operations expenses


(99,313)


(80,751)


23 %


(188,312)


(160,105)


18 %

Equity awards compensation expense


2,550


3,636


(30) %


5,118


6,005


(15) %

Depreciation and Amortization expense


3,729


3,702


1 %


7,338


7,656


(4) %

Pension service costs


39


53


(26) %


79


106


(25) %

Acquisition-related costs


178



NM


178



NM

Restructuring related and transformation (gain) costs


4,076


1,551


NM


4,532


8,918


(49) %

Non GAAP - Sales and Operations expenses


(88,741)


(71,809)


24 %


(171,067)


(137,420)


24 %

General and Administrative expenses


(34,988)


(40,474)


(14) %


(68,324)


(73,902)


(8) %

Equity awards compensation expense


3,892


3,815


2 %


6,847


6,832


— %

Depreciation and Amortization expense


606


838


(28) %


1,216


1,741


(30) %

Pension service costs


89


109


(18) %


182


219


(17) %

Acquisition-related costs


1,799


3,047


(41) %


4,343


3,047


43 %

Restructuring related and transformation (gain) costs


820


3,614


(77) %


1,065


6,447


(83) %

Non GAAP - General and Administrative expenses


(27,782)


(29,051)


(4) %


(54,671)


(55,616)


(2) %

Total Operating expenses


(175,797)


(163,140)


7.8 %


(332,159)


(307,619)


8.0 %

Equity awards compensation expense


12,020


11,669


3 %


21,510


19,551


10 %

Depreciation and Amortization expense


7,516


6,747


11 %


15,028


13,357


13 %

Pension service costs


264


337


(22) %


539


675


(20) %

Acquisition-related costs


1,977


3,047


(35) %


4,521


3,047


48 %

Restructuring related and transformation (gain) costs


5,925


9,996


(41) %


6,635


21,632


(69) %

Total Non GAAP Operating expenses (1)


$    (148,095)


$    (131,344)


13 %


$    (283,926)


$    (249,357)


14 %


(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




Six Months Ended





June 30,




June 30,





2022


2021


YoY
Change


2022


2021


YoY
Change

Equity awards compensation expense













Research and development


$      5,578


$      4,218


32 %


$      9,545


$      6,714


42 %

Sales and operations


2,550


3,636


(30) %


5,118


6,005


(15) %

General and administrative


3,892


3,815


2 %


6,847


6,832


— %

Total equity awards compensation expense


12,020


11,669


3 %


21,510


19,551


10 %














Pension service costs













Research and development


136


175


(22) %


278


350


(21) %

Sales and operations


39


53


(26) %


79


106


(25) %

General and administrative


89


109


(18) %


182


219


(17) %

Total pension service costs


264


337


(22) %


539


675


(20) %














Depreciation and amortization expense













Cost of revenue (data center equipment)


12,625


15,744


(20) %


27,257


30,988


(12) %

Research and development


3,181


2,207


44 %


6,474


3,960


63 %

Sales and operations


3,729


3,702


1 %


7,338


7,656


(4) %

General and administrative


606


838


(28) %


1,216


1,741


(30) %

Total depreciation and amortization expense


20,141


22,491


(10) %


42,285


44,345


(5) %














Acquisition-related costs













Research and development




NM




NM

Sales and operations


178



NM


178



NM

General and administrative


1,799


3,047


(41) %


4,343


3,047


43 %

Total acquisition-related costs


1,977


3,047


(35) %


4,521


3,047


48 %














Restructuring related and transformation (gain) costs













Research and development


1,029


4,831


(79) %


1,038


6,267


(83) %

Sales and operations


4,076


1,551


NM


4,532


8,918


(49) %

General and administrative


820


3,614


(77) %


1,065


6,447


(83) %

Total restructuring related and transformation (gain) costs


$      5,925


$      9,996


(41) %


$      6,635


$    21,632


(69) %

 

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




Six Months Ended





June 30,




June 30,





2022


2021


YoY
Change


2022


2021


YoY
Change














Net income


$        17,674


$        15,029


18 %


$        38,952


$        38,479


1 %

Adjustments:













Equity awards compensation expense


12,020


11,669


3 %


21,510


19,551


10 %

Amortization of acquisition-related intangible assets


3,614


2,936


23 %


7,322


5,871


25 %

Acquisition-related costs


1,977


3,047


(35) %


4,521


3,047


48 %

Restructuring related and transformation (gain) costs


5,925


9,996


(41) %


6,635


21,632


(69) %

Tax impact of the above adjustments (1)


(5,373)


(1,821)


NM


(9,329)


(4,572)


NM

Total net adjustments


18,163


25,827


(30) %


30,659


45,529


(33) %

Adjusted net income (2)


$        35,837


$        40,856


(12) %


$        69,611


$        84,008


(17) %














Weighted average shares outstanding













 - Basic


60,240,344


60,663,301




60,488,429


60,702,780



 - Diluted


62,303,670


64,665,212




62,957,718


64,371,603
















Adjusted net income per share













 - Basic


$            0.59


$            0.67


(12) %


$            1.15


$            1.38


(17) %

 - Diluted


$            0.58


$            0.63


(8) %


$            1.11


$            1.31


(15) %




























(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




Six Months Ended





June 30,




June 30,





2022


2021


YoY

Change


2022


2021


YoY

Change














Gross Profit as reported


$    184,975


$    182,869


1 %


$    368,999


$    361,567


2 %














Other cost of revenue as reported


(29,550)


(37,364)


(21) %


(62,443)


(72,076)


(13) %














Contribution ex-TAC as reported(2)


214,525


220,233


(3) %


431,442


433,643


(1) %

Conversion impact U.S. dollar/other currencies


21,129





34,908




Contribution ex-TAC at constant currency(2)


235,654


220,233


7 %


466,350


433,643


8 %

Contribution ex-TAC(2)/Revenue as reported


43 %


40 %




43 %


40 %
















Traffic acquisition costs as reported(2)


(280,565)


(331,078)


(15) %


(574,215)


(658,745)


(13) %

Conversion impact U.S. dollar/other currencies


(17,401)





(28,811)




Traffic acquisition costs at constant currency(2)


(297,966)


(331,078)


(10) %


(603,026)


(658,745)


(8) %














Revenue as reported(2)


495,090


551,311


(10) %


1,005,657


1,092,388


(8) %

Conversion impact U.S. dollar/other currencies


38,530





63,719




Revenue at constant currency(2)


$    533,620


$    551,311


(3) %


$ 1,069,376


$ 1,092,388


(2) %


(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.

 

CRITEO S.A.
Information on Share Count
(unaudited)




Six Months Ended



2022


2021

Shares outstanding as at January 1,


60,675,474


60,639,570

Weighted average number of shares issued during the period


(187,045)


63,210

Basic number of shares - Basic EPS basis


60,488,429


60,702,780

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


2,469,289


3,668,823

Diluted number of shares - Diluted EPS basis


62,957,718


64,371,603






Shares issued as June 30, before Treasury stocks


65,794,032


66,697,360

Treasury stock as of June 30,


(5,265,393)


(6,080,008)

Shares outstanding as of June 30, after Treasury stocks


60,528,639


60,617,352

Total dilutive effect of share options, warrants, employee warrants


6,874,991


8,438,680

Fully diluted shares as at June 30,


67,403,630


69,056,032

 

CRITEO S.A.
Supplemental Financial Information and Operating Metrics
(U.S. dollars in thousands except where stated, unaudited)



YoY

Change

QoQ
Change

Q2

2022

Q1

2022

Q4

2021

Q3

2021

Q2

2021

Q1

2021

Q4

2020

Q3

2020

Q2

2020













Clients

2 %

0.5 %

21,711

21,597

21,745

21,747

21,332

20,626

21,460

20,565

20,359













Revenue 

(10) %

(3) %

495,090

510,567

653,267

508,580

551,311

541,077

661,282

470,345

437,614

Americas

(4) %

9 %

213,340

194,847

287,270

204,428

221,227

203,900

312,817

204,618

185,674

EMEA

(15) %

(9) %

176,867

193,954

234,559

188,354

209,303

212,096

232,137

167,800

159,621

APAC

(13) %

(14) %

104,883

121,766

131,438

115,798

120,781

125,081

116,328

97,927

92,319













Revenue

(10) %

(3) %

495,090

510,567

653,267

508,580

551,311

541,077

661,282

470,345

437,614

Marketing Solutions

(10) %

(5) %

440,423

463,888

577,962

458,622

487,465

483,190

543,262

412,126

381,270

Retail Media (2)

(14) %

17 %

54,667

46,679

75,305

49,958

63,846

57,887

118,020

58,219

56,344













TAC

(15) %

(4) %

(280,565)

(293,650)

(377,076)

(297,619)

(331,078)

(327,667)

(408,108)

(284,401)

(257,698)

Marketing Solutions

(11) %

(6) %

(262,454)

(277,800)

(349,584)

(276,498)

(294,132)

(290,873)

(324,017)

(243,616)

(218,990)

Retail Media (2)

(51) %

14 %

(18,111)

(15,850)

(27,492)

(21,121)

(36,946)

(36,794)

(84,091)

(40,785)

(38,708)













Contribution ex-TAC (1)

(3) %

(1) %

214,525

216,917

276,191

210,961

220,233

213,410

253,174

185,944

179,916

Marketing Solutions

(8) %

(4) %

177,969

186,088

228,378

182,124

193,333

192,317

219,245

168,510

162,280

Retail Media (2)

36 %

19 %

36,556

30,829

47,813

28,837

26,900

21,093

33,929

17,434

17,636













Cash flow from operating activities 

(47) %

(81) %

13,972

74,930

66,012

51,179

26,360

77,362

44,080

51,156

33,377













Capital expenditures

18 %

178 %

15,452

5,564

10,145

15,957

13,128

13,780

22,302

12,898

18,532













Capital expenditures/Revenue

(1)ppt

(1)ppt

3 %

1 %

2 %

3 %

2 %

3 %

3 %

3 %

4 %













Net cash position

15 %

(5) %

562,546

589,343

515,527

497,458

489,521

520,060

488,011

626,744

578,181













Headcount

22 %

7 %

3,146

2,939

2,781

2,658

2,572

2,532

2,594

2,636

2,685













Days Sales Outstanding (days - end of month)

10 days

2 days

76

74

65

70

66

64

56

62

61


(1) We define Contribution ex-TAC as a profitability measure akin to gross profit. It is calculated by deducting traffic acquisition costs from revenue and reconciled to gross profit through the exclusion of other 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. 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 is expected to increase. Contribution ex-TAC is not impacted by this transition.

 

Cision View original content:https://www.prnewswire.com/news-releases/criteo-reports-strong-second-quarter-2022-results-301598370.html

SOURCE Criteo S.A.

Copyright 2022 PR Newswire

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