CRITEO REPORTS RECORD SECOND QUARTER 2024 RESULTS
Raises Full Year 2024 Outlook
Announces Retail Media Investor Update on November 18, 2024
NEW YORK, Aug. 1, 2024 /PRNewswire/ -- Criteo S.A. (NASDAQ: CRTO) ("Criteo" or the "Company"), the commerce media company, today announced financial results for the second quarter ended June 30, 2024.
Second Quarter 2024 Financial Highlights:
The following table summarizes our consolidated financial results for the three months and six months ended June 30, 2024:
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 YoY 2024 2023 YoY
Change Change
(in millions, except EPS data)
GAAP Results
Revenue $471 $469 1 % $921 $914 1 %
Gross Profit $233 $200 17 % $450 $381 18 %
Net Income (loss) $28 $(2) NM $37 $(14) 361 %
Gross Profit margin 49 % 43 % 6ppt 49 % 42 % 7 ppt
Diluted EPS $0.46 $(0.05) NM $0.58 $(0.26) 323 %
Cash from operating activities $17 $1 NM $31 $43 (28) %
Cash and cash equivalents $217 $223 (3) % $217 $223 (3) %
Non-GAAP Results(1)
Contribution ex-TAC $267 $240 11 % $521 $461 13 %
Adjusted EBITDA $93 $56 67 % $164 $95 73 %
Adjusted diluted EPS $1.08 $0.53 104 % $1.88 $1.03 83 %
Free Cash Flow (FCF) $(4) $(44) 91 % $(3) $(35) 91 %
FCF / Adjusted EBITDA (4) % (79) % 75ppt (2) % (37) % 35 ppt
"Our transformation is coming to life and we continue to seize the exciting opportunities in front of us, positioning ourselves for a promising future," said Megan Clarken, Chief Executive Officer of Criteo. "Our focus remains on executing our plan to drive sustainable growth and maximize shareholder value."
Operating Highlights
-- Retail Media Contribution ex-TAC grew 24% year-over-year at constant
currency(2) and same-retailer Contribution ex-TAC(3) retention for
Retail Media was 131%.
-- We expanded our platform adoption to 2,900 brands and 225 retailers and
marketplaces, including Dollar General, QVC, Belk, MyTheresa, Selfridges
and Grab.
-- We announced a strategic collaboration with Microsoft Advertising to
drive Retail Media growth.
-- Performance Media(4) Contribution ex-TAC was up 11% year-over-year at
constant currency.
-- Criteo's activated media spend(5) was $4.3 billion in the last 12 months
and $1.0 billion in Q2 2024, growing 7% year-over-year at constant
currency(2).
-- We deployed $102 million of capital for share repurchases in the first
half of 2024.
-- Ernst Teunissen was appointed to the Company's Board of Directors at the
2024 Annual Meeting of Shareholders.
(___________________________________________________)
1 Contribution ex-TAC, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted diluted EPS and Free Cash Flow are not measures calculated in accordance with U.S. GAAP.
2 Constant currency measures exclude the impact of foreign currency fluctuations and is computed by applying the prior year monthly exchange rates to transactions denominated in settlement or billing currencies other than the US dollar.
3 Same-retailer Contribution ex-TAC retention is the Contribution ex-TAC generated by clients that were live with us in a given quarter and are still live with us the same quarter in the following year.
4 Beginning with the first quarter of 2024, Criteo changed its segment reporting structure to two reportable segments: Retail Media and Performance Media. See the Form 8-K filed with the SEC on March 4, 2024 for more details.
5 Activated media spend is defined as the media spend activated on behalf of our Retail Media clients and our Performance Media clients.
Financial Summary
Revenue for Q2 2024 was $471 million, gross profit was $233 million and Contribution ex-TAC was $267 million. Net income for Q2 was $28 million, or $0.46 per share on a diluted basis. Adjusted EBITDA for Q2 was $93 million, resulting in an adjusted diluted EPS of $1.08. As reported, revenue for Q2 increased by 1%, gross profit increased 17% and Contribution ex-TAC increased by 11%. At constant currency, revenue for Q2 increased by 3% and Contribution ex-TAC increased by 14%. Cash flow from operating activities was $17 million in Q2 and Free Cash Flow was $(4) million in Q2. As of June 30, 2024, we had $239 million in cash and marketable securities on our balance sheet.
Sarah Glickman, Chief Financial Officer, said, "We are raising our full-year 2024 guidance after another record quarter in Q2. We enter the second half of the year in a position of strength and confidence to deliver double-digit growth with continued margin expansion."
Second Quarter 2024 Results
Revenue, Gross Profit and Contribution ex-TAC
Revenue increased by 1% year-over-year in Q2 2024, or 3% at constant currency, to $471 million (Q2 2023: $469 million). Gross profit increased by 17% year-over-year in Q2 2024 to $233 million (Q2 2023: $200 million). Gross profit as a percentage of revenue, or gross profit margin, was 49% (Q2 2023: 43%). Contribution ex-TAC in the second quarter increased 11% year-over-year, or increased 14% at constant currency, to $267 million (Q2 2023: $240 million).
-- Retail Media revenue increased 23%, or 23% at constant currency,
reflecting continued strength in Retail Media onsite. Retail Media
Contribution ex-TAC increased 24%, or 24% at constant currency, driven
by continued strength in Retail Media onsite, new client integrations
and growing network effects of the platform.
-- Performance Media revenue decreased (2)%, or increased 1% at constant
currency, and Performance Media Contribution ex-TAC increased 8%, or 11%
at constant currency, driven by the continued traction of Commerce
Audiences as more clients adopt full funnel activation.
Net Income (Loss) and Adjusted Net Income
Net income was $28 million in Q2 2024 (Q2 2023: net loss of $(2) million). Net income allocated to shareholders of Criteo was $27 million, or $0.46 per share on a diluted basis (Q2 2023: net loss available to shareholders of $(3) million, or $(0.05) per share on a diluted basis).
Adjusted net income, a non-GAAP financial measure, was $64 million, or $1.08 per share on a diluted basis (Q2 2023: $30 million, or $0.53 per share on a diluted basis).
Adjusted EBITDA and Operating Expenses
Adjusted EBITDA was $93 million, representing an increase of 67% year-over-year (Q2 2023: $56 million). This primarily reflects higher Contribution ex-TAC over the period and effective cost management. Adjusted EBITDA as a percentage of Contribution ex-TAC, or Adjusted EBITDA margin, was 35% (Q2 2023: 23%).
Operating expenses decreased by (1)% year-over-year to $196 million (Q2 2023: $199 million), mostly driven by cost efficiencies partially offset by planned growth investments. Non-GAAP operating expenses decreased by (6)% year-over-year to $149 million (Q2 2023: $157 million).
Cash Flow, Cash and Financial Liquidity Position
Cash flow from operating activities was $17 million in Q2 2024 (Q2 2023: $1 million).
Free Cash Flow, defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment, was $(4) million in Q2 2024 (Q2 2023: $(44) million). On a trailing 12-month basis, Free Cash Flow was $142 million.
Cash and cash equivalents, and marketable securities, were $239 million, a $(120) million decrease compared to December 31, 2023, after spending $102 million on share repurchases in the first half of 2024.
As of June 30, 2024, the Company had total financial liquidity of approximately $675 million, including its cash position, marketable securities, revolving credit facility and treasury shares reserved for M&A.
2024 Business Outlook
The following forward-looking statements reflect Criteo's expectations as of August 1, 2024.
Fiscal year 2024 guidance:
-- We now expect Contribution ex-TAC to grow +10% to +12% at constant
currency, compared to our previous guidance of high-single-digit growth
at constant currency.
-- We now expect an Adjusted EBITDA margin of approximately 32% of
Contribution ex-TAC, compared to our previous guidance of approximately
31% of Contribution ex-TAC.
Third quarter 2024 guidance:
-- We expect Contribution ex-TAC between $264 million and $268 million, or
year-over-year growth at constant-currency of +8% to +10%.
-- We expect Adjusted EBITDA between $72 million and $76 million.
The guidance for the second quarter and fiscal year ending December 31, 2024 assumes the following exchange rates for the main currencies impacting our business: a U.S. dollar-euro rate of 0.922, a U.S. dollar-Japanese Yen rate of 155, a U.S. dollar-British pound rate of 0.787, a U.S. dollar-Korean Won rate of 1,363 and a U.S. dollar-Brazilian real rate of 5.15.
The guidance assumes that no additional acquisitions are completed during the third quarter of 2024 or the fiscal year ended December 31, 2024.
Reconciliations of Contribution ex-TAC, Adjusted EBITDA and Adjusted EBITDA margin guidance to the closest corresponding U.S. GAAP measures are not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures; in particular, the measures and effects of equity awards compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our share price. The variability of the above charges could potentially have a significant impact on our future U.S. GAAP financial results.
Retail Media Investor Update
Criteo also announced today that it will webcast its Retail Media investor presentation on November 18, 2024. The event will be an opportunity for the Company to provide an update on its Retail Media business and opportunities ahead.
Non-GAAP Financial Measures
This press release and its attachments include the following financial measures defined as non-GAAP financial measures by the U.S. Securities and Exchange Commission ("SEC"): Contribution ex-TAC, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted diluted EPS, Free Cash Flow and Non-GAAP Operating Expenses. These measures are not calculated in accordance with U.S. GAAP.
Contribution ex-TAC is a profitability measure akin to gross profit. It is calculated by deducting traffic acquisition costs from revenue and reconciled to gross profit through the exclusion of other costs of revenue. Contribution ex-TAC is not a measure calculated in accordance with U.S. GAAP. We have included Contribution ex-TAC because it is a key measure used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions. In particular, we believe that this measure can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Contribution ex-TAC provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors.
Adjusted EBITDA is our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity awards compensation expense, pension service costs, certain restructuring, integration and transformation costs, and certain acquisition costs. Adjusted EBITDA and Adjusted EBITDA margin are key measures used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, we believe that Adjusted EBITDA and Adjusted EBITDA margin can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.
Adjusted Net Income is our net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related assets, certain restructuring, integration and transformation costs, certain acquisition costs, and the tax impact of these adjustments. Adjusted Net Income and Adjusted diluted EPS are key measures used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that Adjusted Net Income and Adjusted diluted EPS can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted Net Income and Adjusted diluted EPS provide useful information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.
Free Cash Flow is defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment. Free Cash Flow Conversion is defined as free cash flow divided by Adjusted EBITDA. Free Cash Flow and Free Cash Flow Conversion are key measures used by our management and board of directors to evaluate the Company's ability to generate cash. Accordingly, we believe that Free Cash Flow and Free Cash Flow Conversion permit a more complete and comprehensive analysis of our available cash flows.
Non-GAAP Operating Expenses are our consolidated operating expenses adjusted to eliminate equity awards compensation expense, pension service costs, certain restructuring, integration and transformation costs, and certain acquisition and integration costs. The Company uses Non-GAAP Operating Expenses to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short-term and long-term operational plans, and to assess and measure our financial performance and the ability of our operations to generate cash. We believe Non-GAAP Operating Expenses reflects our ongoing operating expenses in a manner that allows for meaningful period-to-period comparisons and analysis of trends in our business. As a result, we believe that Non-GAAP Operating Expenses provides useful information to investors in understanding and evaluating our core operating performance and trends in the same manner as our management and in comparing financial results across periods. In addition, Non-GAAP Operating Expenses is a key component in calculating Adjusted EBITDA, which is one of the key measures the Company uses to provide its quarterly and annual business outlook to the investment community.
Please refer to the supplemental financial tables provided in the appendix of this press release for a reconciliation of Contribution ex-TAC to gross profit, Adjusted EBITDA to net income, Adjusted Net Income to net income, Free Cash Flow to cash flow from operating activities, and Non-GAAP Operating Expenses to operating expenses, in each case, the most comparable U.S. GAAP measure. Our use of non-GAAP financial measures has limitations as an analytical tool, and you should not consider such non-GAAP measures in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: 1) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; and 2) other companies may report Contribution ex-TAC, Contribution ex-TAC margin, Adjusted EBITDA, Adjusted Net Income, Free Cash Flow, Non-GAAP Operating Expenses or similarly titled measures but calculate them differently or over different regions, which reduces their usefulness as comparative measures. Because of these and other limitations, you should consider these measures alongside our U.S. GAAP financial results, including revenue and net income.
Forward-Looking Statements Disclosure
This press release contains forward-looking statements, including projected financial results for the quarter ending September 30, 2024 and the year ending December 31, 2024, our expectations regarding our market opportunity and future growth prospects and other statements that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to: failure related to our technology and our ability to innovate and respond to changes in technology, uncertainty regarding our ability to access a consistent supply of internet display advertising inventory and expand access to such inventory, including without limitation uncertainty regarding the timing and scope of proposed changes to and enhancements of the Chrome browser announced by Google, investments in new business opportunities and the timing of these investments, whether the projected benefits of acquisitions materialize as expected, uncertainty regarding international growth and expansion (including related to changes in a specific country's or region's political or economic conditions), the impact of competition, uncertainty regarding legislative, regulatory or self-regulatory developments regarding data privacy matters and the impact of efforts by other participants in our industry to comply therewith, the impact of consumer resistance to the collection and sharing of data, our ability to access data through third parties, failure to enhance our brand cost-effectively, recent growth rates not being indicative of future growth, our ability to manage growth, potential fluctuations in operating results, our ability to grow our base of clients, and the financial impact of maximizing Contribution ex-TAC, as well as risks related to future opportunities and plans, including the uncertainty of expected future financial performance and results and those risks detailed from time-to-time under the caption "Risk Factors" and elsewhere in the Company's SEC filings and reports, including the Company's Annual Report on Form 10-K filed with the SEC on February 23, 2024, and in subsequent Quarterly Reports on Form 10-Q as well as future filings and reports by the Company. Importantly, at this time, macro-economic conditions including inflation and volatile interest rates in the U.S. have impacted Criteo's business, financial condition, cash flow and results of operations.
Except as required by law, the Company undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events, changes in expectations or otherwise.
Conference Call Information
Criteo's senior management team will discuss the Company's earnings on a call that will take place today, August 1, 2024, at 8:00 AM ET, 2:00 PM CET. The conference call will be webcast live on the Company's website at https://criteo.investorroom.com/ and will subsequently be available for replay.
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About Criteo
Criteo (NASDAQ: CRTO) is the global commerce media company that enables marketers and media owners to drive better commerce outcomes. Its industry leading Commerce Media Platform connects thousands of marketers and media owners to deliver richer consumer experiences from product discovery to purchase. By powering trusted and impactful advertising, Criteo supports an open internet that encourages discovery, innovation, and choice. For more information, please visit www.criteo.com.
Contacts
Criteo Investor Relations
Melanie Dambre, m.dambre@criteo.com
Criteo Public Relations
Jessica Meyers, j.meyers@criteo.com
Financial information to follow
CRITEO S.A.
Consolidated Statement of Financial Position
(U.S. dollars in thousands, unaudited)
June 30, 2024 December 31, 2023
Assets
Current assets:
Cash and cash equivalents $216,698 $336,341
Trade receivables, net of allowances of $ 38.7 million and $ 43.3 million at June 30, 2024 and December 31, 2023, respectively 632,749 775,589
Income taxes 16,673 2,065
Other taxes 132,465 109,306
Other current assets 49,021 48,291
Restricted cash 75,000 75,000
Marketable securities - current portion 16,480 5,970
Total current assets 1,139,086 1,352,562
Property, plant and equipment, net 115,886 126,494
Intangible assets, net 172,744 180,888
Goodwill 519,924 524,197
Right of Use Asset - operating lease 103,507 112,487
Marketable securities - non current portion 5,353 16,575
Non-current financial assets 5,441 5,294
Other non-current assets 59,699 60,742
Deferred tax assets 46,226 52,680
Total non-current assets 1,028,780 1,079,357
Total assets $2,167,866 $2,431,919
Liabilities and shareholders' equity
Current liabilities:
Trade payables $635,208 $838,522
Contingencies - current portion 1,373 1,467
Income taxes 3,334 17,213
Financial liabilities - current portion 7,020 3,389
Lease liability - operating - current portion 27,736 35,398
Other taxes 89,322 66,659
Employee - related payables 94,166 113,287
Other current liabilities 97,733 104,552
Total current liabilities 955,892 1,180,487
Deferred tax liabilities 3,061 1,083
Defined benefit plans 4,231 4,123
Financial liabilities - non current portion 306 77
Lease liability - operating - non current portion 78,801 83,051
Contingencies - non current portion 32,625 32,625
Other non-current liabilities 19,760 19,082
Total non-current liabilities 138,784 140,041
Total liabilities 1,094,676 1,320,528
Commitments and contingencies
Shareholders' equity:
Common shares, EUR0.025 par value, 59,063,486 and 61,165,663 shares authorized, issued and outstanding at June 30, 2024 and December 31, 2023, respectively. 1,967 2,023
Treasury stock, 4,461,517 and 5,400,572 shares at cost as of June 30, 2024 and December 31, 2023 , respectively. (154,254) (161,788)
Additional paid-in capital 761,681 769,240
Accumulated other comprehensive income (loss) (103,848) (85,326)
Retained earnings 537,241 555,456
Equity - attributable to shareholders of Criteo S.A. 1,042,787 1,079,605
Non-controlling interests 30,403 31,786
Total equity 1,073,190 1,111,391
Total equity and liabilities $2,167,866 $2,431,919
CRITEO S.A.
Consolidated Statement of Operations
(U.S. dollars in thousands, except share and per share data, unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 2024 2023
Revenue $471,307 $468,934 $921,362 $913,950
Cost of revenue
Traffic acquisition cost (204,214) (228,717) (400,381) (453,115)
Other cost of revenue (34,248) (40,435) (70,913) (79,544)
Gross profit 232,845 199,782 450,068 381,291
Operating expenses:
Research and development expenses (59,639) (67,775) (126,497) (131,365)
Sales and operations expenses (95,069) (112,511) (187,911) (213,753)
General and administrative expenses (41,199) (18,537) (88,368) (58,707)
Total Operating expenses (195,907) (198,823) (402,776) (403,825)
Income (loss) from operations 36,938 959 47,292 (22,534)
Financial and Other income (284) (1,852) 897 4,975
Income (loss) before taxes 36,654 (893) 48,189 (17,559)
Provision for income tax (expense) benefit (8,595) (1,078) (11,564) 3,517
Net income (loss) $28,059 $(1,971) $36,625 $(14,042)
Net income (loss) available to shareholders of Criteo S.A. $26,987 $(2,876) $34,231 $(14,685)
Net income (loss) available to non-controlling interests $1,072 $905 $2,394 $643
Weighted average shares outstanding used in computing per share amounts:
Basic 54,684,560 55,924,824 54,915,140 56,094,887
Diluted 58,974,186 55,924,824 59,151,582 56,094,887
Net income (loss) allocated to shareholders per share:
Basic $0.49 $(0.05) $0.62 $(0.26)
Diluted $0.46 $(0.05) $0.58 $(0.26)
CRITEO S.A.
Consolidated Statement of Cash Flows
(U.S. dollars in thousands, unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 2024 2023
Net income (loss) $28,059 $(1,971) $36,625 $(14,042)
Non-cash and non-operating items 22,413 16,939 82,574 48,886
- Amortization and provisions 21,089 10,111 46,324 37,422
- Equity awards compensation expense (1) 20,686 27,173 47,978 52,341
- Net (gain) or loss on disposal of non-current assets 574 (7) 574 (8,797)
- Change in uncertain tax positions 875 (407) 1,757 (467)
- Net change in fair value of earn-out (50) 430 3,187 516
- Change in deferred taxes 4,915 (8,239) 8,089 (20,536)
- Change in income taxes (26,165) (13,478) (28,420) (13,615)
- Other 489 1,356 3,085 2,022
Changes in working capital related to operating activities (33,285) (13,640) (87,995) 8,448
- (Increase) / Decrease in trade receivables (21,536) (34,666) 136,520 129,454
- Increase / (Decrease) in trade payables 8,711 16,454 (193,210) (128,557)
- (Increase) / Decrease in other current assets 12,836 6,942 (24,021) (6,652)
- Increase / (Decrease) in other current liabilities (31,206) (2,069) (4,472) 14,597
- Change in operating lease liabilities and right of use assets (2,090) (301) (2,812) (394)
CASH FROM OPERATING ACTIVITIES 17,187 1,328 31,204 43,292
Acquisition of intangible assets, property, plant and equipment (23,675) (24,312) (36,968) (61,507)
Change in accounts payable related to intangible assets, property, plant and equipment 2,556 (21,207) 2,625 (17,231)
Payment for business, net of cash acquired (457) (527) (6,957)
Proceeds from disposition of investment 9,625
Change in other non-current financial assets (139) (6,259) (287) (12,267)
CASH USED FOR INVESTING ACTIVITIES (21,258) (52,235) (35,157) (88,337)
Proceeds from exercise of stock options 812 431 1,207 1,697
Repurchase of treasury stocks (40,352) (23,836) (102,495) (74,866)
Cash payment for contingent consideration (22,025)
Change in other financing activities (378) (495) (810) (923)
CASH USED FOR FINANCING ACTIVITIES (39,918) (23,900) (102,098) (96,117)
Effect of exchange rates changes on cash and cash equivalents (6,175) (7,673) (13,507) (8,855)
Net decrease in cash and cash equivalents and restricted cash (50,164) (82,480) (119,558) (150,017)
Net cash and cash equivalents and restricted cash at beginning of period 341,862 380,663 411,257 448,200
Net cash and cash equivalents and restricted cash at end of period $291,698 $298,183 $291,698 $298,183
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for taxes, net of refunds $(23,403) $(23,201) $(24,571) $(31,101)
Cash paid for interest $(326) $(60) $(653) $(676)
(1) Share-based compensation expense, net of capitalized stock-based compensation relating to internally developed software according to ASC 718 Compensation - stock compensation accounted for $20.3 million million and $26.7 million of equity awards compensation expense for the quarters ended June 30, 2024 and 2023, respectively, and $47.1 million and $51.4 million of equity awards compensation expense for the six months ended June 30, 2024 and 2023, respectively.
CRITEO S.A.
Reconciliation of Cash from Operating Activities to Free Cash Flow
(U.S. dollars in thousands, unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 2024 2023
CASH FROM OPERATING ACTIVITIES $17,187 $1,328 $31,204 $43,292
Acquisition of intangible assets, property, plant and equipment (23,675) (24,312) (36,968) (61,507)
Change in accounts payable related to intangible assets, property, plant and equipment 2,556 (21,207) 2,625 (17,231)
FREE CASH FLOW (1) $(3,932) $(44,191) $(3,139) $(35,446)
(1) Free Cash Flow is defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment.
CRITEO S.A.
Reconciliation of Contribution ex-TAC to Gross Profit
(U.S. dollars in thousands, unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 YoY Change 2024 2023 YoY Change
Gross Profit 232,845 199,782 17 % 450,068 381,291 18 %
Other Cost of Revenue 34,248 40,435 (15) % 70,913 79,544 (11) %
Contribution ex-TAC (1) $267,093 $240,217 11 % $520,981 $460,835 13 %
(1) Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric.
CRITEO S.A.
Segment Information
(U.S. dollars in thousands, unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
Segment 2024 2023 YoY YoY 2024 2023 YoY YoY
Change Change Change Change
at at
Constant Constant
Currency Currency
(3) (3)
Revenue
Retail Media $54,777 $44,590 23 % 23 % $105,649 $82,611 28 % 28 %
Performance Media
(1) 416,530 424,344 (2) % 1 % 815,713 831,339 (2) % 0.1 %
Total 471,307 468,934 1 % 3 % 921,362 913,950 1 % 3 %
Contribution ex-TAC
Retail Media 53,866 43,518 24 % 24 % 104,035 80,870 29 % 28 %
Performance Media 213,227 196,699 8 % 11 % 416,946 379,965 10 % 12 %
Total (2) $267,093 $240,217 11 % 14 % $520,981 $460,835 13 % 15 %
(1) Beginning with the first quarter of 2024, Criteo changed its segment reporting structure to two reportable segments: Retail Media and Performance Media. See the Form 8-K filed with the SEC on March 4, 2024 for more details.
(2) Refer to the Non-GAAP Financial Measures section of this filing for a definition of the Non-GAAP metric.
(3) Constant currency measures exclude the impact of foreign currency fluctuations and is computed by applying the prior year monthly exchange rates to transactions denominated in settlement or billing currencies other than the US dollar.
CRITEO S.A.
Reconciliation of Adjusted EBITDA to Net Income (Loss)
(U.S. dollars in thousands, unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 YoY 2024 2023 YoY
Change Change
Net income (loss) $28,059 $(1,971) NM $36,625 $(14,042) 361 %
Adjustments:
Financial (Income) expense 284 1,956 (85) % (897) (4,650) 81 %
Provision for income taxes 8,595 1,078 697 % 11,564 (3,517) 429 %
Equity awards compensation expense 21,877 27,831 (21) % 49,169 53,896 (9) %
Pension service costs 172 177 (3) % 344 353 (3) %
Depreciation and amortization expense 25,077 26,606 (6) % 49,995 51,926 (4) %
Acquisition-related costs 362 (100) % 1,194 (100) %
Net loss contingency on regulatory matters (21,616) 100 % (21,616) 100 %
Restructuring, integration and transformation costs 9,366 21,563 (57) % 17,309 31,165 (44) %
Total net adjustments 65,371 57,957 13 % 127,484 108,751 17 %
Adjusted EBITDA (1) $93,430 $55,986 67 % $164,109 $94,709 73 %
(1) Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric.
CRITEO S.A.
Reconciliation from Non-GAAP Operating Expenses to Operating Expenses under GAAP
(U.S. dollars in thousands, unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 YoY 2024 2023 YoY
Change Change
Research and Development expenses $(59,639) $(67,775) (12) % $(126,497) $(131,365) (4) %
Equity awards compensation expense 9,059 16,339 (45) % 23,653 32,675 (28) %
Depreciation and Amortization expense 12,275 8,518 44 % 24,603 18,844 31 %
Pension service costs 90 94 (4) % 181 186 (3) %
Acquisition-related costs 99 (100) % 503 (100) %
Restructuring, integration and transformation costs 2,237 4,467 (50) % 2,708 5,341 (49) %
Non GAAP - Research and Development expenses (35,978) (38,258) (6) % (75,352) (73,816) 2 %
Sales and Operations expenses (95,069) (112,511) (16) % (187,911) (213,753) (12) %
Equity awards compensation expense 5,334 5,687 (6) % 11,061 10,427 6 %
Depreciation and Amortization expense 3,137 4,059 (23) % 6,370 6,875 (7) %
Pension service costs 26 27 (4) % 52 55 (5) %
Restructuring, integration and transformation costs 4,144 12,667 (67) % 4,638 17,401 (73) %
Non GAAP - Sales and Operations expenses (82,428) (90,071) (8) % (165,790) (178,995) (7) %
General and Administrative expenses (41,199) (18,537) 122 % (88,368) (58,707) 51 %
Equity awards compensation expense 7,483 5,805 29 % 14,454 10,794 34 %
Depreciation and Amortization expense 435 566 (23) % 888 1,086 (18) %
Pension service costs 56 56 - % 111 112 (1) %
Acquisition-related costs 263 (100) % 691 (100) %
Restructuring, integration and transformation costs 2,984 4,429 (33) % 9,962 8,423 18 %
Net loss contingency on regulatory matters (21,616) 100 % (21,616) 100 %
Non GAAP - General and Administrative expenses (30,241) (29,034) 4 % (62,953) (59,217) 6 %
Total Operating expenses (195,907) (198,823) (1) % (402,776) (403,825) - %
Equity awards compensation expense 21,877 27,831 (21) % 49,169 53,896 (9) %
Depreciation and Amortization expense 15,847 13,143 21 % 31,861 26,805 19 %
Pension service costs 172 177 (3) % 344 353 (3) %
Acquisition-related costs 362 (100) % 1,194 (100) %
Restructuring, integration and transformation costs 9,365 21,563 (57) % 17,308 31,165 (44) %
Net loss contingency on regulatory matters (21,616) 100 % (21,616) 100 %
Total Non GAAP Operating expenses (1) (148,646) $(157,363) (6) % (304,094) (312,028) (3) %
(1) Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric.
CRITEO S.A.
Reconciliation of Adjusted Net Income to Net Income (Loss)
(U.S. dollars in thousands except share and per share data, unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 YoY 2024 2023 YoY
Change Change
Net income (loss) $28,059 $(1,971) NM $36,625 $(14,042) 361 %
Adjustments:
Equity awards compensation expense 21,877 27,831 (21) % 49,169 53,896 (9) %
Amortization of acquisition-related intangible assets 8,613 8,812 (2) % 17,292 17,345 - %
Acquisition-related costs 362 (100) % 1,194 (100) %
Net loss contingency on regulatory matters (21,616) 100 % (21,616) 100 %
Restructuring, integration and transformation costs 9,366 21,563 (57) % 17,309 31,165 (44) %
Tax impact of the above adjustments (1) (4,198) (5,333) 21 % (9,186) (10,282) 11 %
Total net adjustments 35,658 31,619 13 % 74,584 71,702 4 %
Adjusted net income(2) $63,717 $29,648 115 % $111,209 $57,660 93 %
Weighted average shares outstanding
- Basic 54,684,560 55,924,824 54,915,140 56,094,887
- Diluted 58,974,186 55,924,824 59,151,582 56,094,887
Adjusted net income per share
- Basic $1.17 $0.53 121 % $2.03 $1.03 97 %
- Diluted $1.08 $0.53 104 % $1.88 $1.03 83 %
(1) We consider the nature of the adjustment to determine its tax treatment in the various tax jurisdictions we operate in. The tax impact is calculated by applying the actual tax rate for the entity and period to which the adjustment relates.
(2) Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric.
CRITEO S.A.
Constant Currency Reconciliation(1)
(U.S. dollars in thousands, unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2024 2023 YoY 2024 2023 YoY
Change Change
Gross Profit as reported $232,845 $199,782 17 % $450,068 $381,291 18 %
Other cost of revenue as reported 34,248 40,435 (15) % 70,913 79,544 (11) %
Contribution ex-TAC as reported(2) 267,093 240,217 11 % 520,981 460,835 13 %
Conversion impact U.S. dollar/other currencies 5,602 9,324
Contribution ex-TAC at constant currency 272,695 240,217 14 % 530,305 460,835 15 %
Traffic acquisition costs as reported 204,214 228,717 (11) % 400,381 453,115 (12) %
Conversion impact U.S. dollar/other currencies 4,580 7,089
Traffic acquisition costs at constant currency 208,794 228,717 (9) % 407,470 453,115 (10) %
Revenue as reported 471,307 468,934 1 % 921,362 913,950 1 %
Conversion impact U.S. dollar/other currencies 10,181 16,412
Revenue at constant currency $481,488 $468,934 3 % $937,774 $913,950 3 %
(1) Constant currency measures exclude the impact of foreign currency fluctuations and is computed by applying the prior year monthly exchange rates to transactions denominated in settlement or billing currencies other than the US dollar.
(2) Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric.
CRITEO S.A.
Information on Share Count
(unaudited)
Six Months Ended
2024 2023
Shares outstanding as at January 1, 55,765,091 57,263,624
Weighted average number of shares issued during the period (849,951) (1,168,737)
Basic number of shares - Basic EPS basis 54,915,140 56,094,887
Dilutive effect of share options, warrants, employee warrants - Treasury method 4,236,442
Diluted number of shares - Diluted EPS basis 59,151,582 56,094,887
Shares issued as at June 30, before Treasury stocks 59,063,486 63,337,453
Treasury stocks as of June 30, (4,461,517) (7,412,578)
Shares outstanding as of June 30, after Treasury stocks 54,601,969 55,924,875
Total dilutive effect of share options, warrants, employee warrants 7,618,460 9,340,335
Fully diluted shares as at June 30, 62,220,429 65,265,210
CRITEO S.A.
Supplemental Financial Information and Operating Metrics
(U.S. dollars in thousands except where stated, unaudited)
YoY QoQ Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2
Change Change 2024 2024 2023 2023 2023 2023 2022 2022 2022
Clients (5) % - % 17,744 17,767 18,197 18,423 18,646 18,679 18,990 19,008 18,911
Revenue 1 % 5 % 471,307 450,055 566,302 469,193 468,934 445,016 564,425 446,921 495,090
Americas 2 % 7 % 212,374 198,365 280,597 219,667 208,463 188,288 281,806 201,274 213,340
EMEA 3 % 3 % 168,496 162,842 189,291 158,756 163,969 160,214 185,125 150,915 176,867
APAC (6) % 2 % 90,437 88,848 96,414 90,770 96,502 96,514 97,494 94,732 104,883
Revenue 1 % 5 % 471,307 450,055 566,302 469,193 468,934 445,016 564,425 446,921 495,090
Retail Media 23 % 8 % 54,777 50,872 76,583 49,813 44,590 38,021 59,801 41,170 54,667
Performance Media (2) % 4 % 416,530 399,183 489,719 419,380 424,344 406,995 504,624 405,751 440,423
TAC (11) % 4 % (204,214) (196,167) (249,926) (223,798) (228,717) (224,398) (281,021) (233,543) (280,565)
Retail Media (15) % 30 % (911) (703) (2,429) (1,377) (1,072) (669) (2,719) (4,277) (18,111)
Performance Media (11) % 4 % (203,303) (195,464) (247,497) (222,421) (227,645) (223,729) (278,302) (229,266) (262,454)
Contribution ex-TAC (1) 11 % 5 % 267,093 253,888 316,376 245,395 240,217 220,618 283,404 213,378 214,525
Retail Media 24 % 7 % 53,866 50,169 74,154 48,436 43,518 37,352 57,082 36,893 36,556
Performance Media 8 % 5 % 213,227 203,719 242,222 196,959 196,699 183,266 226,322 176,485 177,969
Cash flow from operating activities NM 23 % 17,187 14,017 161,340 19,614 1,328 41,964 125,455 41,628 13,972
Capital expenditures (54) % 60 % 21,119 13,224 19,724 15,849 45,519 33,219 14,522 20,307 15,452
Net cash position (2) % (15) % 291,698 341,862 411,257 269,857 298,183 380,663 448,200 407,323 562,546
Headcount (0.5) % (2) % 3,498 3,559 3,563 3,487 3,514 3,636 3,716 3,537 3,146
Days Sales Outstanding (days - end of month) (2) (5) days (2) days 64 66 58 61 69 74 71 78 76
(1) Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric.
(2) From September 2023, we have included Iponweb in our calculation of Days Sales Outstanding. Days Sales Outstanding excluding Iponweb would have been 71 days for the same period.
View original content:https://www.prnewswire.com/news-releases/criteo-reports-record-second-quarter-2024-results-302211275.html
SOURCE Criteo S.A.
