CRITEO REPORTS RECORD THIRD QUARTER 2024 RESULTS
Expects to Return a Record $180 Million of Capital to Shareholders in 2024
Hosting Retail Media Investor Update on November 18, 2024
NEW YORK, Oct. 30, 2024 /PRNewswire/ -- Criteo S.A. (NASDAQ: CRTO) ("Criteo" or the "Company"), the commerce media company, today announced financial results for the third quarter ended September 30, 2024.
Third Quarter 2024 Financial Highlights:
The following table summarizes our consolidated financial results for the three months and nine months ended September 30, 2024:
Three Months Ended Nine Months Ended
September 30, September 30,
2024 2023 YoY 2024 2023 YoY
Change Change
(in millions, except EPS data)
GAAP Results
Revenue $459 $469 (2) % $1,380 $1,383 - %
Gross Profit $232 $205 13 % $682 $586 16 %
Net Income (loss) $6 $7 (7) % $43 $(7) 677 %
Gross Profit margin 51 % 44 % 7ppt 49 % 42 % 7 ppt
Diluted EPS $0.11 $0.12 (8) % $0.69 $(0.14) 593 %
Cash from operating activities $58 $20 193 % $89 $63 41 %
Cash and cash equivalents $209 $195 7 % $209 $195 7 %
Non-GAAP Results(1)
Contribution ex-TAC $266 $245 8 % $787 $706 11 %
Adjusted EBITDA $82 $68 20 % $246 $163 51 %
Adjusted diluted EPS $0.96 $0.71 35 % $2.84 $1.66 71 %
Free Cash Flow (FCF) $39 $4 925 % $35 $(32) 212 %
FCF / Adjusted EBITDA 47 % 6 % 41ppt 14 % (19) % 33 ppt
"We are pleased to report another strong quarter with robust growth and solid progress across our strategic initiatives," said Megan Clarken, Chief Executive Officer of Criteo. "Our momentum is a testament to our team's hard work and the trust our clients place in us. We remain focused on executing our plan to create the world's leading Commerce Media Platform and drive shareholder value."
Operating Highlights
-- Retail Media Contribution ex-TAC grew 23% year-over-year at constant
currency(2) and same-retailer Contribution ex-TAC(3) retention for
Retail Media was 120%.
-- We expanded our platform adoption to 3,100 brands and 225 retailers and
marketplaces, including JCPenney, Office Depot & ODP Business Solutions,
Metro AG, Flaschenpost and Rohlik.
-- Kinective Media by United Airlines chose Criteo to help power and scale
its offsite monetization.
-- Performance Media(4) Contribution ex-TAC was up 5% year-over-year at
constant currency.
-- Criteo's activated media spend(5) was $4.3 billion in the last 12 months
and $1.1 billion in Q3 2024, down (2)% year-over-year at constant
currency(2).
-- We deployed $157 million of capital for share repurchases in the first
nine months of 2024, and we expect to return $180 million of capital to
shareholders in 2024.
-- Criteo was named a Leader in IDC MarketScape's 2024 worldwide retail
media network service providers vendor assessment.
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 Q3 2024 was $459 million, gross profit was $232 million and Contribution ex-TAC was $266 million. Net income for Q3 was $6 million, or $0.11 per share on a diluted basis. Adjusted EBITDA for Q3 was $82 million, resulting in an adjusted diluted EPS of $0.96. As reported, revenue for Q3 decreased by (2)%, gross profit increased 13% and Contribution ex-TAC increased by 8%. At constant currency, revenue for Q3 decreased by (2)% and Contribution ex-TAC increased by 9%. Cash flow from operating activities was $58 million in Q3 and Free Cash Flow was $39 million in Q3. As of September 30, 2024, we had $237 million in cash and marketable securities on our balance sheet.
Sarah Glickman, Chief Financial Officer, said, "We delivered strong operating leverage enabled by top-line growth and disciplined cost management in Q3. We enter the holiday season with confidence to deliver double-digit growth and margin expansion for the year while continuing to invest in our transformation."
Third Quarter 2024 Results
Revenue, Gross Profit and Contribution ex-TAC
Revenue decreased by (2)% year-over-year in Q3 2024, or (2)% at constant currency, to $459 million (Q3 2023: $469 million). Gross profit increased by 13% year-over-year in Q3 2024 to $232 million (Q3 2023: $205 million). Gross profit as a percentage of revenue, or gross profit margin, was 51% (Q3 2023: 44%). Contribution ex-TAC in the third quarter increased 8% year-over-year, or increased 9% at constant currency, to $266 million (Q3 2023: $245 million).
-- Retail Media revenue increased 22%, or 22% at constant currency,
reflecting continued strength in Retail Media onsite. Retail Media
Contribution ex-TAC increased 23%, or 23% 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 (5)%, or (5)% at constant currency,
and Performance Media Contribution ex-TAC increased 5%, or 5% at
constant currency, driven by the continued traction of Commerce
Audiences as more clients adopt full funnel activation and resilient
Retargeting, partially offset by lower AdTech services and supply.
Net Income (Loss) and Adjusted Net Income
Net income was $6 million in Q3 2024 (Q3 2023: net income of $7 million). Net income allocated to shareholders of Criteo was $6 million, or $0.11 per share on a diluted basis (Q3 2023: net income available to shareholders of $7 million, or $0.12 per share on a diluted basis).
Adjusted net income, a non-GAAP financial measure, was $56 million, or $0.96 per share on a diluted basis (Q3 2023: $43 million, or $0.71 per share on a diluted basis).
Adjusted EBITDA and Operating Expenses
Adjusted EBITDA was $82 million, representing an increase of 20% year-over-year (Q3 2023: $68 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 31% (Q3 2023: 28%).
Operating expenses increased by 15% year-over-year to $222 million (Q3 2023: $194 million), mostly driven by planned growth investments. Non-GAAP operating expenses increased by 7% year-over-year to $158 million (Q3 2023: $148 million).
Cash Flow, Cash and Financial Liquidity Position
Cash flow from operating activities was $58 million in Q3 2024 (Q3 2023: $20 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 $39 million in Q3 2024 (Q3 2023: $4 million). On a trailing 12-month basis, Free Cash Flow was $177 million.
Cash and cash equivalents, and marketable securities, were $237 million, a $(122) million decrease compared to December 31, 2023, after spending $157 million on share repurchases in the nine months ended September 30, 2024.
As of September 30, 2024, the Company had total financial liquidity of approximately $711 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 October 30, 2024.
Fiscal year 2024 guidance:
-- We now expect Contribution ex-TAC to grow +10% to 11% at constant
currency.
-- We now expect an Adjusted EBITDA margin of approximately 32% to 33% of
Contribution ex-TAC.
Fourth quarter 2024 guidance:
-- We expect Contribution ex-TAC between $327 million and $333 million, or
year-over-year growth at constant-currency of +3% to +5%.
-- We expect Adjusted EBITDA between $114 million and $120 million.
The guidance for the fourth 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 0.915, a U.S. dollar-Japanese Yen rate of 151, a U.S. dollar-British pound rate of 0.778, a U.S. dollar-Korean Won rate of 1,353 and a U.S. dollar-Brazilian real rate of 5.34.
The guidance assumes that no additional acquisitions are completed during the fourth quarter of 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 will webcast its Retail Media investor presentation on November 18, 2024, starting at 8:30 AM ET, 2:30 PM CET. The event will be an opportunity for the Company to provide an update on its Retail Media business and opportunities ahead. It will be accessible via live webcast or on-demand via our Investor site post-event.
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 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 fluctuating 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, October 30, 2024, at 8:00 AM ET, 1:00 PM CET. The conference call will be webcast live on the Company's website at https://criteo.investorroom.com/ and will subsequently be available for replay.
-- United States: +1 800 836 8184
-- International: +1 646 357 8785
-- France 080-094-5120
Please ask to be joined into the "Criteo" call.
About Criteo
Criteo (NASDAQ: CRTO) is the global commerce media company that enables marketers and media owners to drive better commerce outcomes. Its industry leading Commerce Media Platform connects thousands of marketers and media owners to deliver richer consumer experiences from product discovery to purchase. By powering trusted and impactful advertising, Criteo supports an open internet that encourages discovery, innovation, and choice. For more information, please visit www.criteo.com.
Contacts
Criteo Investor Relations
Melanie Dambre, m.dambre@criteo.com
Criteo Public Relations
Jessica Meyers, j.meyers@criteo.com
Financial information to follow
CRITEO S.A.
Consolidated Statement of Financial Position
(U.S. dollars in thousands, unaudited)
September 30, 2024 December 31, 2023
Assets
Current assets:
Cash and cash equivalents $208,740 $336,341
Trade receivables, net of allowances of $ 35.1 million and $ 43.3 million at 646,283 775,589
September 30, 2024 and December 31, 2023, respectively
Income taxes 9,785 2,065
Other taxes 132,370 109,306
Other current assets 44,879 48,291
Restricted cash 75,250 75,000
Marketable securities - current portion 23,010 5,970
Total current assets 1,140,317 1,352,562
Property, plant and equipment, net 116,866 126,494
Intangible assets, net 170,359 180,888
Goodwill 526,569 524,197
Right of Use Asset - operating lease 110,350 112,487
Marketable securities - non current portion 5,598 16,575
Non-current financial assets 4,957 5,294
Other non-current assets 62,216 60,742
Deferred tax assets 71,128 52,680
Total non-current assets 1,068,043 1,079,357
Total assets $2,208,360 $2,431,919
Liabilities and shareholders' equity
Current liabilities:
Trade payables $629,997 $838,522
Contingencies - current portion 1,604 1,467
Income taxes 15,490 17,213
Financial liabilities - current portion 4,753 3,389
Lease liability - operating - current portion 26,159 35,398
Other taxes 83,401 66,659
Employee - related payables 104,095 113,287
Other current liabilities 109,118 104,552
Total current liabilities 974,617 1,180,487
Deferred tax liabilities 3,182 1,083
Defined benefit plans 4,938 4,123
Financial liabilities - non current portion 320 77
Lease liability - operating - non current portion 87,321 83,051
Contingencies - non current portion 31,939 32,625
Other non-current liabilities 20,536 19,082
Total non-current liabilities 148,236 140,041
Total liabilities 1,122,853 1,320,528
Commitments and contingencies
Shareholders' equity:
Common shares, EUR0.025 par value, 59,180,216 and 61,165,663 shares 1,970 2,023
authorized, issued and outstanding at September 30, 2024 and December 31,
2023, respectively.
Treasury stock, 4,399,179 and 5,400,572 shares at cost as of September 30, (152,997) (161,788)
2024 and December 31, 2023 , respectively.
Additional paid-in capital 728,707 769,240
Accumulated other comprehensive income (loss) (83,345) (85,326)
Retained earnings 557,072 555,456
Equity - attributable to shareholders of Criteo S.A. 1,051,407 1,079,605
Non-controlling interests 34,100 31,786
Total equity 1,085,507 1,111,391
Total equity and liabilities $2,208,360 $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 Nine Months Ended
September 30, September 30,
2024 2023 2024 2023
Revenue $458,892 $469,193 $1,380,254 $1,383,143
Cost of revenue
Traffic acquisition cost (192,789) (223,798) (593,170) (676,913)
Other cost of revenue (34,171) (40,268) (105,084) (119,812)
Gross profit 231,932 205,127 682,000 586,418
Operating expenses:
Research and development expenses (85,285) (62,522) (211,782) (193,887)
Sales and operations expenses (90,823) (94,572) (278,734) (308,325)
General and administrative expenses (46,222) (36,599) (134,590) (95,306)
Total Operating expenses (222,330) (193,693) (625,106) (597,518)
Income (loss) from operations 9,602 11,434 56,894 (11,100)
Financial and Other income (8) (2,967) 889 2,008
Income (loss) before taxes 9,594 8,467 57,783 (9,092)
Provision for income tax (expense) benefit (3,450) (1,832) (15,014) 1,685
Net income (loss) $6,144 $6,635 $42,769 $(7,407)
Net income (loss) available to shareholders of Criteo S.A. $6,245 $6,927 $40,476 $(7,758)
Net income (loss) available to non-controlling interests $(101) $(292) $2,293 $351
Weighted average shares outstanding used in computing per
share amounts:
Basic 54,695,112 56,297,666 54,840,650 56,173,218
Diluted 58,430,133 60,172,953 58,909,952 56,173,218
Net income (loss) allocated to shareholders per share:
Basic $0.11 $0.12 $0.74 $(0.14)
Diluted $0.11 $0.12 $0.69 $(0.14)
CRITEO S.A.
Consolidated Statement of Cash Flows
(U.S. dollars in thousands, unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2024 2023 2024 2023
Net income (loss) $6,144 $6,635 $42,769 $(7,407)
Non-cash and non-operating items 53,439 (6,180) 136,013 42,706
- Amortization and provisions 20,810 18,866 67,134 56,288
- Payment for contingent liability on regulatory matters (43,334) (43,334)
- Equity awards compensation expense 34,215 24,012 82,193 76,353
- Net (gain) or loss on disposal of non-current assets 350 (106) 924 (8,903)
- Change in uncertain tax positions 7 153 1,764 (314)
- Net change in fair value of earn-out 15 983 3,202 1,499
- Change in deferred taxes (24,459) (4,206) (16,370) (24,742)
- Change in income taxes 19,099 (4,392) (9,321) (18,007)
- Other 3,402 1,844 6,487 3,866
Changes in working capital related to operating activities (2,080) 19,159 (90,075) 27,607
- (Increase) / Decrease in trade receivables 2,075 (50,564) 138,595 78,890
- Increase / (Decrease) in trade payables (17,653) 57,367 (210,863) (71,190)
- (Increase) / Decrease in other current assets 7,591 8,620 (16,430) 1,968
- Increase / (Decrease) in other current liabilities 5,924 3,329 1,452 17,926
- Change in operating lease liabilities and right of use assets (17) 407 (2,829) 13
CASH FROM OPERATING ACTIVITIES 57,503 19,614 88,707 62,906
Acquisition of intangible assets, property, plant and equipment (19,396) (16,331) (56,364) (77,838)
Change in accounts payable related to intangible assets, property, 497 482 3,122 (16,749)
plant and equipment
Payment for business, net of cash acquired (527) (6,957)
Proceeds from disposition of investment 9,625
Change in other non-current financial assets (4,910) (13) (5,197) (12,280)
CASH USED FOR INVESTING ACTIVITIES (23,809) (15,862) (58,966) (104,199)
Proceeds from exercise of stock options 3,226 251 4,433 1,948
Repurchase of treasury stocks (54,997) (28,488) (157,492) (103,354)
Cash payment for contingent consideration (22,025)
Change in other financing activities (486) (504) (1,296) (1,427)
CASH USED FOR FINANCING ACTIVITIES (52,257) (28,741) (154,355) (124,858)
Effect of exchange rates changes on cash and cash equivalents 10,855 (3,337) (2,737) (12,192)
Net decrease in cash and cash equivalents and restricted cash (7,708) (28,326) (127,351) (178,343)
Net cash and cash equivalents and restricted cash at beginning of 291,698 298,183 411,341 448,200
period
Net cash and cash equivalents and restricted cash at end of $283,990 $269,857 $283,990 $269,857
period
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid for taxes, net of refunds $(11,528) $(10,276) $(36,099) $(41,377)
Cash paid for interest $(379) $(439) $(1,032) $(1,055)
CRITEO S.A.
Reconciliation of Cash from Operating Activities to Free Cash Flow
(U.S. dollars in thousands, unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2024 2023 2024 2023
CASH FROM OPERATING ACTIVITIES $57,503 $19,614 $88,707 $62,906
Acquisition of intangible assets, property, plant and equipment (19,396) (16,331) (56,364) (77,838)
Change in accounts payable related to intangible assets, property, plant and 497 482 3,122 (16,749)
equipment
FREE CASH FLOW (1) $38,604 $3,765 $35,465 $(31,681)
(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 Nine Months Ended
September 30, September 30,
2024 2023 YoY Change 2024 2023 YoY Change
Gross Profit 231,932 205,127 13 % 682,000 586,418 16 %
Other Cost of Revenue 34,171 40,268 (15) % 105,084 119,812 (12) %
Contribution ex-TAC (1) $266,103 $245,395 8 % $787,084 $706,230 11 %
(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 Nine Months Ended
September 30, September 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 $60,765 $49,813 22 % 22 % $166,414 $132,424 26 % 26 %
Performance Media
(1) 398,127 419,380 (5) % (5) % 1,213,840 1,250,719 (3) % (1.5) %
Total 458,892 469,193 (2) % (2) % 1,380,254 1,383,143 - % 1 %
Contribution ex-TAC
Retail Media 59,583 48,436 23 % 23 % 163,618 129,306 27 % 26 %
Performance Media 206,520 196,959 5 % 5 % 623,466 576,924 8 % 10 %
Total (2) $266,103 $245,395 8 % 9 % $787,084 $706,230 11 % 13 %
(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 Nine Months Ended
September 30, September 30,
2024 2023 YoY 2024 2023 YoY
Change Change
Net income (loss) $6,144 $6,635 (7) % $42,769 $(7,407) 677 %
Adjustments:
Financial (Income) expense 8 2,958 (100) % (889) (1,692) 47 %
Provision for income taxes 3,450 1,832 88 % 15,014 (1,685) 991 %
Equity awards compensation expense 34,863 24,323 43 % 84,032 78,219 7 %
Pension service costs 174 179 (3) % 518 532 (3) %
Depreciation and amortization expense 25,684 24,648 4 % 75,679 76,574 (1) %
Acquisition-related costs 1,961 86 NM 1,961 1,281 53 %
Net loss contingency on regulatory matters (51) 100 % (21,667) 100 %
Restructuring, integration and transformation costs 9,717 7,833 24 % 27,026 38,998 (31) %
Total net adjustments 75,857 61,808 23 % 203,341 170,560 19 %
Adjusted EBITDA (1) $82,001 $68,443 20 % $246,110 $163,153 51 %
(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 Nine Months Ended
September 30, September 30,
2024 2023 YoY 2024 2023 YoY
Change Change
Research and Development expenses $(85,285) $(62,522) 36 % $(211,782) $(193,887) 9 %
Equity awards compensation expense 21,261 11,938 78 % 44,915 44,613 1 %
Depreciation and Amortization expense 13,593 9,383 45 % 38,196 28,227 35 %
Pension service costs 92 95 (3) % 273 281 (3) %
Acquisition-related costs 4 (100) % 507 (100) %
Restructuring, integration and transformation costs 5,455 3,482 57 % 8,164 8,823 (7) %
Non GAAP - Research and Development expenses (44,884) (37,620) 19 % (120,234) (111,436) 8 %
Sales and Operations expenses (90,823) (94,572) (4) % (278,734) (308,325) (10) %
Equity awards compensation expense 5,032 6,387 (21) % 16,093 16,814 (4) %
Depreciation and Amortization expense 3,279 3,252 1 % 9,649 10,127 (5) %
Pension service costs 26 28 (7) % 78 83 (6) %
Restructuring, integration and transformation costs 855 (391) 319 % 5,493 17,010 (68) %
Non GAAP - Sales and Operations expenses (81,631) (85,296) (4) % (247,421) (264,291) (6) %
General and Administrative expenses (46,222) (36,599) 26 % (134,590) (95,306) 41 %
Equity awards compensation expense 8,570 5,998 43 % 23,024 16,792 37 %
Depreciation and Amortization expense 437 564 (23) % 1,325 1,650 (20) %
Pension service costs 56 56 - % 167 168 (1) %
Acquisition-related costs 1,961 82 NM 1,961 774 153 %
Restructuring, integration and transformation costs 3,407 4,742 (28) % 13,369 13,165 2 %
Net loss contingency on regulatory matters (51) 100 % (21,667) 100 %
Non GAAP - General and Administrative expenses (31,791) (25,208) 26 % (94,744) (84,424) 12 %
Total Operating expenses (222,330) (193,693) 15 % (625,106) (597,518) 5 %
Equity awards compensation expense 34,863 24,323 43 % 84,032 78,219 7 %
Depreciation and Amortization expense 17,309 13,199 31 % 49,170 40,004 23 %
Pension service costs 174 179 (3) % 518 532 (3) %
Acquisition-related costs 1,961 86 NM 1,961 1,281 53 %
Restructuring, integration and transformation costs 9,717 7,833 24 % 27,026 38,998 (31) %
Net loss contingency on regulatory matters (51) 100 % (21,667) 100 %
Total Non GAAP Operating expenses (1) (158,306) $(148,124) 7 % (462,399) (460,151) - %
(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 Nine Months Ended
September 30, September 30,
2024 2023 YoY 2024 2023 YoY
Change Change
Net income (loss) $6,144 $6,635 (7) % $42,769 $(7,407) 677 %
Adjustments:
Equity awards compensation expense 34,863 24,323 43 % 84,032 78,219 7 %
Amortization of acquisition-related intangible assets 8,995 8,692 3 % 26,287 26,037 1 %
Acquisition-related costs 1,961 86 NM 1,961 1,281 53 %
Net loss contingency on regulatory matters (51) 100 % (21,667) 100 %
Restructuring, integration and transformation costs 9,717 7,833 24 % 27,026 38,998 (31) %
Tax impact of the above adjustments (1) (5,862) (4,785) (23) % (15,048) (15,067) - %
Total net adjustments 49,674 36,098 38 % 124,258 107,801 15 %
Adjusted net income(2) $55,818 $42,733 31 % $167,027 $100,394 66 %
Weighted average shares outstanding
- Basic 54,695,112 56,297,666 54,840,650 56,173,218
- Diluted 58,430,133 60,172,953 58,909,952 60,394,517
Adjusted net income per share
- Basic $1.02 $0.76 34 % $3.05 $1.79 70 %
- Diluted $0.96 $0.71 35 % $2.84 $1.66 71 %
(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 Nine Months Ended
September 30, September 30,
2024 2023 YoY 2024 2023 YoY
Change Change
Gross Profit as reported $231,932 $205,127 13 % $682,000 $586,418 16 %
Other cost of revenue as reported 34,171 40,268 (15) % 105,084 119,812 (12) %
Contribution ex-TAC as reported(2) 266,103 245,395 8 % 787,084 706,230 11 %
Conversion impact U.S. dollar/other currencies 534 9,858
Contribution ex-TAC at constant currency 266,637 245,395 9 % 796,942 706,230 13 %
Traffic acquisition costs as reported 192,789 223,798 (14) % 593,170 676,913 (12) %
Conversion impact U.S. dollar/other currencies 1,164 8,253
Traffic acquisition costs at constant currency 193,953 223,798 (13) % 601,423 676,913 (11) %
Revenue as reported 458,892 469,193 (2) % 1,380,254 1,383,143 - %
Conversion impact U.S. dollar/other currencies 1,698 18,110
Revenue at constant currency $460,590 $469,193 (2) % $1,398,364 $1,383,143 1 %
(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)
Nine 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 (924,441) (1,090,406)
Basic number of shares - Basic EPS basis 54,840,650 56,173,218
Dilutive effect of share options, warrants, employee warrants - Treasury method 4,069,302
Diluted number of shares - Diluted EPS basis 58,909,952 56,173,218
Shares issued as at September 30, before Treasury stocks 59,180,216 63,350,663
Treasury stocks as of September 30, (4,399,179) (7,094,574)
Shares outstanding as of September 30, after Treasury stocks 54,781,037 56,256,089
Total dilutive effect of share options, warrants, employee warrants 7,238,687 8,341,387
Fully diluted shares as at September 30, 62,019,724 64,597,476
CRITEO S.A.
Supplemental Financial Information and Operating Metrics
(U.S. dollars in thousands except where stated, unaudited)
YoY QoQ Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3
Change Change 2024 2024 2024 2023 2023 2023 2023 2022 2022
Clients (7) % (3) % 17,162 17,744 17,767 18,197 18,423 18,646 18,679 18,990 19,008
Revenue (2) % (3) % 458,892 471,307 450,055 566,302 469,193 468,934 445,016 564,425 446,921
Americas (6) % (3) % 206,816 212,374 198,365 280,597 219,667 208,463 188,288 281,806 201,274
EMEA 2 % (4) % 161,745 168,496 162,842 189,291 158,756 163,969 160,214 185,125 150,915
APAC - % - % 90,331 90,437 88,848 96,414 90,770 96,502 96,514 97,494 94,732
Revenue (2) % (3) % 458,892 471,307 450,055 566,302 469,193 468,934 445,016 564,425 446,921
Retail Media 22 % 11 % 60,765 54,777 50,872 76,583 49,813 44,590 38,021 59,801 41,170
Performance Media (5) % (4) % 398,127 416,530 399,183 489,719 419,380 424,344 406,995 504,624 405,751
TAC (14) % (6) % (192,789) (204,214) (196,167) (249,926) (223,798) (228,717) (224,398) (281,021) (233,543)
Retail Media (14) % 30 % (1,182) (911) (703) (2,429) (1,377) (1,072) (669) (2,719) (4,277)
Performance Media (14) % (6) % (191,607) (203,303) (195,464) (247,497) (222,421) (227,645) (223,729) (278,302) (229,266)
Contribution ex-TAC (1) 8 % - % 266,103 267,093 253,888 316,376 245,395 240,217 220,618 283,404 213,378
Retail Media 23 % 11 % 59,583 53,866 50,169 74,154 48,436 43,518 37,352 57,082 36,893
Performance Media 5 % (3) % 206,520 213,227 203,719 242,222 196,959 196,699 183,266 226,322 176,485
Cash flow from 193 % 235 % 57,503 17,187 14,017 161,340 19,614 1,328 41,964 125,455 41,628
operating activities
Capital expenditures 19 % (11) % 18,899 21,119 13,224 19,724 15,849 45,519 33,219 14,522 20,307
Net cash position 5 % (3) % 283,990 291,698 341,862 411,257 269,857 298,183 380,663 448,200 407,323
Headcount - % - % 3,504 3,498 3,559 3,563 3,487 3,514 3,636 3,716 3,537
Days Sales Outstanding 4 days 1 days 65 64 66 58 61 69 74 71 78
(days - end of month) (2)
(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-third-quarter-2024-results-302290801.html
SOURCE Criteo Corp
