Criteo Reports Strong Financial Results in Second Quarter 2021

Rhea-AI Summary

Criteo S.A. (CRTO) announced strong Q2 2021 financial results, with revenue of $551 million, up 26% year-over-year. Net income surged 144% to $15 million, with diluted EPS increasing 156% to $0.23. Revenue ex-TAC also rose 22%, accounting for 40% of total revenue. Adjusted EBITDA climbed 73% to $67 million. Operating expenses grew 20%, reflecting investments in growth. However, cash flow from operations fell 21% to $26 million. Criteo acquired Mabaya, enhancing its Commerce Media Platform. The company ended the quarter with $490 million in cash and a solid liquidity position.

Positive

• Revenue increased by 26% year-over-year to $551 million.
• Net income rose 144% to $15 million, with EPS at $0.23.
• Adjusted EBITDA grew 73% to $67 million.
• Cash and cash equivalents at $490 million, with over $1 billion in total liquidity.

Negative

• Cash flow from operating activities decreased 21% to $26 million.
• Operating expenses increased by 20%, impacting profitability.

NEW YORK, Aug. 4, 2021 /PRNewswire/ -- Criteo S.A. (NASDAQ: CRTO), the global technology company that provides the world's leading Commerce Media Platform, today announced financial results for the second quarter ended June 30, 2021 that exceeded the Company's quarterly guidance.

Second Quarter 2021 Financial Highlights:

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

	Three Months Ended										Six Months Ended
	June 30,										June 30,
	2021			2020				YoY Change			2021				2020				YoY Change
	(in millions, except EPS data)
GAAP Results
Revenue	$	551		$	438			26	%		$	1,092			$	941			16	%
Net Income	$	15		$	6			144	%		$	38			$	23			70	%
Diluted EPS	$	0.23		$	0.09			156	%		$	0.58			$	0.34			71	%
Cash from operating activities	$	26		$	33			(21)	%		$	104			$	90			15	%
Net cash position	$	490		$	578			(15)	%		$	490			$	578			(15)	%
Non-GAAP Results1
Revenue ex-TAC	$	220		$	180			22	%		$	434			$	386			12	%
Revenue ex-TAC margin	40		%	41		%		(1)	%		40		%		41		%		(1)	%
Adjusted EBITDA	$	67		$	39			73	%		$	143			$	98			46	%
Adjusted diluted EPS	$	0.63		$	0.27			133	%		$	1.31			$	0.79			66	%
Free Cash Flow (FCF)	$	13		$	15			(11)	%		$	77			$	60			28	%

"We continue to execute on our Commerce Media Platform strategy and are excited to see our vision coming to life," said Megan Clarken, CEO. "We feel very good about our solid performance and continued momentum."

Q2 2021 Operating Highlights

• The media spend we activated for marketers and media owners increased 31% year-over-year.
• New solutions grew 50% year-over-year at constant currency² to 25% of total revenue ex-TAC.
• Retail Media revenue grew 10% and Retail Media Revenue ex-TAC grew 49% year-over-year at constant currency². Same-retailer revenue ex-TAC³ for Retail Media increased 65% year-over-year.
• Criteo acquired Mabaya, a leading retail media technology company that powers sponsored products and retail media monetization for major ecommerce marketplaces globally.
• We added Best Buy and a large high-end fashion specialty retailer in the U.S to our Retail Media Platform.
• We added over 700 net new clients and closed the quarter with over 21,300 clients.
• Same-client revenue³ increased 22% and same-client revenue ex-TAC² increased 16% year-over-year at constant currency².
• We expanded our Product leadership team, with a series of key hires to accelerate Product innovation and Go-to-Market.
• During our successful 2021 Investor Day, we revealed our roadmap for the future of the open internet and unveiled our new Criteo branding to align with our significant transformation executed over the last year, including a new logo, visual identity and brand positioning, "The Future is Wide Open".

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¹ Revenue excluding Traffic Acquisition Costs, or Revenue ex-TAC, Revenue ex-TAC margin, Adjusted EBITDA, Adjusted EBITDA at constant currency, Adjusted EBITDA margin, Adjusted diluted EPS, Free Cash Flow and growth at constant currency are not measures calculated in accordance with U.S. GAAP.

² Constant currency measures exclude the impact of foreign currency fluctuations and is computed by applying the 2020 average exchange rates for the relevant period to 2021 figures.

³ Same-client revenue or Revenue ex-TAC is the revenue or Revenue ex-TAC generated by clients that were live with us in a given quarter and still live with us the same quarter in the following year.

Financial Summary

Revenue for Q2 2021 was $551 million and Revenue ex-TAC was $220 million. Adjusted EBITDA for the quarter was $67 million, resulting in an adjusted diluted EPS of $0.63. At constant currency, Q2 2021 Revenue increased by 22% and Revenue ex-TAC increased by 18%. Free Cash Flow was $13 million in Q2 2021, growing 28% in the first half 2021 to $77 million, and driving a Free Cash Flow conversion rate of 54% of Adjusted EBITDA in the first half 2021. As of June 30, 2021, we had $553 million in cash and marketable securities on our balance sheet.

Sarah Glickman, Chief Financial Officer, said, "With strong double-digit growth in our new solutions, fast execution on our leading Commerce Media Platform and solid operating margins, we continue to invest in our sustainable and profitable growth."

Revenue and Revenue ex-TAC

Revenue increased by 26% year-over-year in Q2 2021, or 22% at constant currency, to $551 million (Q2 2020: $438 million). Revenue ex-TAC in the quarter increased 22% year-over-year, or 18% at constant currency, to $220 million (Q2 2020: $180 million). Revenue ex-TAC as a percentage of revenue, or Revenue ex-TAC margin, was 40% (Q2 2020: 41%).

• Marketing Solutions revenue grew 28% (or 23% at constant currency) and Marketing Solutions revenue ex-TAC grew 19% (or 15% at constant currency), driven by increased spend from Retail clients, both on our retargeting and audience targeting solutions, offsetting part of the negative impact from continued lower spend from Travel clients.
• Retail Media revenue grew 13% (or 10% at constant currency) and Retail Media revenue ex-TAC increased 53% (or 49% on a constant currency basis), driven by good execution around Prime Day in North America and continued traction in EMEA.
  
  
• In the Americas, Revenue increased 19% year-over-year, or 19% at constant currency, to $221 million and represented 40% of total Revenue. Revenue ex-TAC increased 24% year-over-year, or 23% at constant currency, to $87 million and represented 40% of total Revenue ex-TAC.
• In EMEA, Revenue increased 31% year-over-year, or 21% at constant currency, to $209 million and represented 38% of total Revenue. Revenue ex-TAC increased 22% year-over-year, or 13% at constant currency, to $85 million and represented 38% of total Revenue ex-TAC.
• In Asia-Pacific, Revenue increased 31% year-over-year, or 29% at constant currency, to $121 million and represented 22% of total Revenue. Revenue ex-TAC increased 22% year-over-year, or 20% at constant currency, to $49 million and represented 22% of total Revenue ex-TAC.

Net Income and Adjusted Net Income

Net income grew 144% to $15 million in Q2 2021 (Q2 2020: $6 million). Net income margin as a percentage of revenue was 3% (Q2 2020: 1%). In the quarter, we incurred $10 million in restructuring related and transformation costs. Net income available to shareholders of Criteo S.A. was $15 million, or $0.23 per share on a diluted basis (Q2 2020: $6 million, or $0.09 per share on a diluted basis).

Adjusted Net Income, or net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related intangible assets, acquisition-related costs, restructuring related and transformation costs and the tax impact of these adjustments, was $41 million, or $0.63 per share on a diluted basis (Q2 2020: $17 million, or $0.27 per share on a diluted basis).

Adjusted EBITDA and Operating Expenses

Adjusted EBITDA increased 73% year-over-year, or 61% at constant currency, to $67 million (Q2 2020: $39 million), driven by the Revenue ex-TAC performance over the period and effective cost management balanced with growth investments. Adjusted EBITDA as a percentage of Revenue ex-TAC, or Adjusted EBITDA margin, was 31% (Q2 2020: 22%).

Operating expenses increased by 20% or $27 million, to $163 million (Q2 2020: $136 million), mostly driven by investments in our growth areas, including R&D, in a context of disciplined expense management. Operating expenses, excluding the impact of equity awards compensation expense, pension costs, acquisition-related costs, restructuring related and transformation costs, and depreciation and amortization, which we refer to as Non-GAAP Operating Expenses, increased by 9% or $11 million, to $131 million (Q2 2020: $120 million), driven by investments in our growth areas, including R&D, and the impact of our growing stock price on our social charges over the period.

Cash Flow, Cash and Financial Liquidity Position

Cash flow from operating activities decreased 21% year-over-year to $26 million in Q2 2021 (Q2 2020: $33 million) and grew 15% to $104 million in the first half 2021 (H1 2020: $90 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 11% to $13 million (Q2 2020: $15 million), but grew 28% in the first half 2021 to $77 million (H1 2020: $60 million), driving a Free Cash Flow conversion rate of 54% of Adjusted EBITDA in the first half 2021 (H1 2020: 61%).

In Q2 2021, we acquired Mabaya, expanding our Commerce Media Platform into the exciting area of online marketplaces. Cash and cash equivalents increased $2 million compared to December 31, 2020 to $490 million, after the Mabaya acquisition and spending $30 million on share repurchases in the second quarter of 2021.

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

Business Outlook

The following forward-looking statements reflect Criteo's expectations as of August 4, 2021.

Fiscal year 2021 guidance:

• We raise our Revenue ex-TAC growth outlook to between +6% and +8% at constant-currency.
• We raise our expectation of our Adjusted EBITDA margin to approximately 32% of Revenue ex-TAC.

Third quarter 2021 guidance:

• We expect Revenue ex-TAC between $202 million and $205 million, translating into constant-currency growth between +8% and +9% year-over-year.
• We expect Adjusted EBITDA between $47 million and $50 million.

The above guidance for the third quarter and the fiscal year ending December 31, 2021 assumes the following exchange rates for the main currencies impacting our business: a U.S. dollar-euro rate of 0.831, a U.S. dollar-Japanese Yen rate of 108, a U.S. dollar-British pound rate of 0.719, a U.S. dollar-Korean Won rate of 1,112 and a U.S. dollar-Brazilian real rate of 5.36.

The above guidance assumes no acquisitions are completed during the third quarter ending September 30, 2021 and fiscal year ended December 31, 2021.

Reconciliation of Revenue ex-TAC and Adjusted EBITDA guidance to the closest corresponding U.S. GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures; in particular, the measures and effects of equity awards compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our share price. The variability of the above charges could potentially have a significant impact on our future U.S. GAAP financial results.

Non-GAAP Financial Measures

This press release and its attachments include the following financial measures defined as non-GAAP financial measures by the U.S. Securities and Exchange Commission ("SEC"): Revenue ex-TAC, Revenue ex-TAC by Region, Revenue ex-TAC by Solution, Revenue ex-TAC margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted diluted EPS, Free Cash Flow and Non-GAAP Operating Expenses. These measures are not calculated in accordance with U.S. GAAP.

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

Accordingly, we believe that Revenue ex-TAC, Revenue ex-TAC by Region, Revenue ex-TAC by Solution and Revenue ex-TAC margin provide useful information to investors and the market generally in understanding and evaluating our operating results in the same manner as our management and board of directors.

Adjusted EBITDA is our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity awards compensation expense, pension service costs and restructuring related and transformation costs.

Adjusted EBITDA and Adjusted EBITDA margin are key measures used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, we believe that by eliminating equity awards compensation expense, pension service costs and restructuring related and transformation costs, Adjusted EBITDA and Adjusted EBITDA margin can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.

Adjusted Net Income is our net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related intangible assets, restructuring related and transformation costs and the tax impact of these adjustments. Adjusted Net Income and Adjusted diluted EPS are key measures used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital.

In particular, we believe that by eliminating equity awards compensation expense, amortization of acquisition-related intangible assets, restructuring related and transformation costs and the tax impact of these adjustments, Adjusted Net Income and Adjusted diluted EPS can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted Net Income and Adjusted diluted EPS provide useful information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.

Free Cash Flow is defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment. Free Cash Flow Conversion is defined as free cash flow divided by Adjusted EBITDA. Free Cash Flow and Free Cash Flow Conversion are key measures used by our management and board of directors to evaluate the Company's ability to generate cash. Accordingly, we believe that Free Cash Flow and Free Cash Flow Conversion permit a more complete and comprehensive analysis of our available cash flows.

Non-GAAP Operating Expenses are our consolidated operating expenses adjusted to eliminate the impact of depreciation and amortization, equity awards compensation expense, pension service costs, and restructuring related and transformation costs. The Company uses Non-GAAP Operating Expenses to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short-term and long-term operational plans, and to assess and measure our financial performance and the ability of our operations to generate cash. We believe Non-GAAP Operating Expenses reflects our ongoing operating expenses in a manner that allows for meaningful period-to-period comparisons and analysis of trends in our business. As a result, we believe that Non-GAAP Operating Expenses provides useful information to investors in understanding and evaluating our core operating performance and trends in the same manner as our management and in comparing financial results across periods. In addition, Non-GAAP Operating Expenses is a key component in calculating Adjusted EBITDA, which is one of the key measures the Company uses to provide its quarterly and annual business outlook to the investment community.

Please refer to the supplemental financial tables provided in the appendix of this press release for a reconciliation of Revenue ex-TAC to revenue, Revenue ex-TAC by Region to revenue by region, Revenue ex-TAC by Solution to revenue by solution, Adjusted EBITDA to net income, Adjusted Net Income to net income, Free Cash Flow to cash flow from operating activities, and Non-GAAP Operating Expenses to operating expenses, in each case, the most comparable U.S. GAAP measure. Our use of non-GAAP financial measures has limitations as an analytical tool, and you should not consider such non-GAAP measures in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: 1) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; and 2) other companies may report Revenue ex-TAC, Revenue ex-TAC by Region, Revenue ex-TAC by Solution, Adjusted EBITDA, Adjusted Net Income, Free Cash Flow, Non-GAAP Operating Expenses or similarly titled measures but calculate them differently or over different regions, which reduces their usefulness as comparative measures. Because of these and other limitations, you should consider these measures alongside our U.S. GAAP financial results, including revenue and net income.

Forward-Looking Statements Disclosure

This press release contains forward-looking statements, including projected financial results for the quarter ending June 30, 2021 and the year ended December 31, 2021, our expectations regarding our market opportunity and future growth prospects and other statements that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to: failure related to our technology and our ability to innovate and respond to changes in technology, uncertainty regarding the scope and impact of the COVID-19 pandemic on our employees, operations, revenue and cash flows, uncertainty regarding our ability to access a consistent supply of internet display advertising inventory and expand access to such inventory, including without limitation uncertainty regarding the timing and scope of proposed changes to and enhancements of the Chrome browser announced by Google, investments in new business opportunities and the timing of these investments, whether the projected benefits of acquisitions materialize as expected, uncertainty regarding international growth and expansion, the impact of competition, uncertainty regarding legislative, regulatory or self-regulatory developments regarding data privacy matters and the impact of efforts by other participants in our industry to comply therewith, the impact of consumer resistance to the collection and sharing of data, our ability to access data through third parties, failure to enhance our brand cost-effectively, recent growth rates not being indicative of future growth, our ability to manage growth, potential fluctuations in operating results, our ability to grow our base of clients, and the financial impact of maximizing Revenue ex-TAC, as well as risks related to future opportunities and plans, including the uncertainty of expected future financial performance and results and those risks detailed from time-to-time under the caption "Risk Factors" and elsewhere in the Company's SEC filings and reports, including the Company's Annual Report on Form 10-K filed with the SEC on February 26, 2021, and in subsequent Quarterly Reports on Form 10-Q as well as future filings and reports by the Company. Importantly, at this time, the COVID-19 pandemic continues to have a significant impact on Criteo's business, financial condition, cash flow and results of operations. There are significant uncertainties about the duration and the extent of the impact of the COVID-19 virus.

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 4, 2021, at 8:00 AM ET, 2:00 PM CET. The conference call will be webcast live on https://www.webcaster4.com/Webcast/Page/1274/42221 and will be available for replay on the Company's website ir.criteo.com.

U.S. callers: International callers:

+1 855 209 8212 +1 412 317 0788 or +33 1 76 74 05 02

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

About Criteo

Criteo (NASDAQ: CRTO) is the global technology company that provides the world's leading Commerce Media Platform. 2,500 Criteo team members partner with over 21,000 marketers and thousands of media owners around the globe to activate the world's largest set of commerce data to drive better commerce outcomes. By powering trusted and impactful advertising, Criteo brings richer experiences to every consumer while supporting a fair and open internet that enables discovery, innovation and choice. For more information, please visit criteo.com.

Contacts

Criteo Investor Relations
Edouard Lassalle, SVP, Market Relations & Capital Markets, e.lassalle@criteo.com
Clemence Vermersch, Director, Investor Relations, c.vermersch@criteo.com

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

Financial information to follow

CRITEO S.A. Consolidated Statement of Financial Position (U.S. dollars in thousands, unaudited)
		June 30, 2021				December 31, 2020
Assets
Current assets:
Cash and cash equivalents		$	489,521			$	488,011
Trade receivables, net of allowances of $42.6 million and $39.9 million at June 30, 2021 and December 31, 2020, respectively		438,703				474,055
Income taxes		13,055				11,092
Other taxes		71,866				69,987
Other current assets		21,841				21,405
Marketable Securities - current portion		53,471				—
Total current assets		1,088,457				1,064,550
Property, plant and equipment, net		161,971				189,505
Intangible assets, net		88,558				79,744
Goodwill		332,295				325,805
Right of Use Asset - operating lease		130,104				114,012
Marketable securities - non current portion		10,000				41,809
Non-current financial assets		14,766				18,109
Deferred tax assets		16,291				19,876
Total non-current assets		753,985				788,860
Total assets		$	1,842,442			$	1,853,410
Liabilities and shareholders' equity
Current liabilities:
Trade payables		$	341,047			$	367,025
Contingencies		1,945				2,250
Income taxes		3,105				2,626
Financial liabilities - current portion		3,219				2,889
Lease liability - operating - current portion		37,243				48,388
Other taxes		54,697				58,491
Employee - related payables		74,491				85,272
Other current liabilities		40,988				33,390
Total current liabilities		556,735				600,331
Deferred tax liabilities		4,176				5,297
Defined benefit plans		6,014				6,167
Financial liabilities - non-current portion		375				386
Lease liability - operating - non-current portion		103,888				83,007
Other non-current liabilities		13,185				5,535
Total non-current liabilities		127,638				100,392
Total liabilities		684,373				700,723
Commitments and contingencies
Shareholders' equity:
Common shares, €0.025 par value, 66,697,360 and 66,272,106  shares authorized, issued and outstanding at June 30, 2021 and December 31, 2020, respectively.		2,173				2,161
Treasury stock, 6,080,008 and  5,632,536 shares at cost as of June 30, 2021 and December 31, 2020, respectively.		(111,823)				(85,570)
Additional paid-in capital		720,762				693,164
Accumulated other comprehensive income (loss)		(7,438)				16,028
Retained earnings		519,893				491,359
Equity - attributable to shareholders of Criteo S.A.		1,123,567				1,117,142
Non-controlling interests		34,502				35,545
Total equity		1,158,069				1,152,687
Total equity and liabilities		$	1,842,442			$	1,853,410

 

 

CRITEO S.A. Consolidated Statement of Income (U.S. dollars in thousands, except share and per share data, unaudited)
		Three Months Ended											Six Months Ended
		June 30,											June 30,
		2021				2020				YoY Change			2021				2020				YoY Change
Revenue		$	551,311			$	437,614			26	%		$	1,092,388			$	940,990			16	%
Cost of revenue
Traffic acquisition cost		(331,078)				(257,698)				28	%		(658,745)				(555,062)				19	%
Other cost of revenue		(37,364)				(33,914)				10	%		(72,076)				(67,720)				6	%
Gross profit		182,869				146,002				25	%		361,567				318,208				14	%
Operating expenses:
Research and development expenses		(41,915)				(31,247)				34	%		(73,612)				(68,762)				7	%
Sales and operations expenses		(80,751)				(75,781)				7	%		(160,105)				(160,755)				(0.4)	%
General and administrative expenses		(40,474)				(29,185)				39	%		(73,902)				(55,100)				34	%
Total Operating expenses		(163,140)				(136,213)				20	%		(307,619)				(284,617)				8	%
Income from operations		19,729				9,789				102	%		53,948				33,591				61	%
Financial expense		(519)				(1,003)				(48)	%		(1,237)				(1,337)				(7)	%
Income before taxes		19,210				8,786				119	%		52,711				32,254				63	%
Provision for income taxes		(4,181)				(2,636)				59	%		(14,232)				(9,676)				47	%
Net Income		$	15,029			$	6,150			144	%		$	38,479			$	22,578			70	%
Net income available to shareholders of Criteo S.A.		$	14,804			$	5,716			159	%		$	37,210			$	21,175			76	%
Net income available to non-controlling interests		$	225			$	434			(48)	%		$	1,269			$	1,403			(10)	%
Weighted average shares outstanding used in computing per share amounts:
Basic		60,663,301				61,415,467							60,702,780				61,553,875
Diluted		64,665,212				61,790,135							64,371,603				61,958,499
Net income allocated to shareholders per share:
Basic		$	0.24			$	0.09			167	%		$	0.61			$	0.34			79	%
Diluted		$	0.23			$	0.09			156	%		$	0.58			$	0.34			71	%

 

 

CRITEO S.A. Consolidated Statement of Cash Flows (U.S. dollars in thousands, unaudited)
		Three Months Ended											Six Months Ended
		June 30,											June 30,
		2021				2020				YoY Change			2021				2020				YoY Change
Net income		$	15,029			$	6,150			144	%		$	38,479			$	22,578			70	%
Non-cash and non-operating items		35,888				33,083				8	%		65,905				65,911				—	%
- Amortization and provisions		25,161				27,907				(10)	%		42,386				54,951				(23)	%
- Equity awards compensation expense (1)		11,670				7,160				63	%		18,885				15,662				21	%
- Net gain or (loss) on disposal of non-current assets		14				(123)				NM			3,959				2,143				85	%
- Change in deferred taxes		(2,693)				(4,939)				(45)	%		2,305				(7,617)				NM
- Change in income taxes		1,724				3,056				(44)	%		(1,655)				727				NM
- Other		12				22				(45)	%		25				45				(44)	%
Changes in working capital related to operating activities		(24,557)				(5,856)				NM			(662)				1,631				NM
- (Increase) / Decrease in trade receivables		(21,031)				27,318				NM			26,195				126,706				(79)	%
- Increase / (Decrease) in trade payables		(9,266)				(22,118)				(58)	%		(19,906)				(103,797)				(81)	%
- (Increase) / Decrease in other current assets		(137)				15,448				NM			(5,187)				5,050				NM
- Increase / (Decrease) in other current liabilities		3,458				(25,503)				NM			(1,069)				(26,448)				(96)	%
- Change in operating lease liabilities and right of use assets		2,419				(1,001)				NM			(695)				120				NM
CASH FROM OPERATING ACTIVITIES		26,360				33,377				(21)	%		103,722				90,120				15	%
Acquisition of intangible assets, property, plant and equipment		(15,663)				(29,471)				(47)	%		(27,616)				(40,729)				(32)	%
Change in accounts payable related to intangible assets, property, plant and equipment		2,535				10,939				(77)	%		708				10,460				(93)	%
Payment for businesses, net of cash acquired		(9,598)				—				NM			(9,598)				—				NM
Change in other non-current financial assets		(17,056)				(21,238)				(20)	%		(20,308)				(20,349)				(0.2)	%
CASH USED FOR INVESTING ACTIVITIES		(39,782)				(39,770)				—	%		(56,814)				(50,618)				12	%
Proceeds from borrowings under line-of-credit agreement		—				154,310				NM			—				154,310				NM
Repayment of borrowings		(1,090)				1				NM			(1,272)				(169)				NM
Proceeds from exercise of stock options		7,501				(20)				NM			9,575				(16)				NM
Repurchase of treasury stocks		(29,999)				(14,860)				NM			(34,929)				(33,101)				6	%
Change in other financial liabilities		(370)				(573)				(35)	%		(748)				(927)				(19)	%
CASH (USED FOR) FROM FINANCING ACTIVITIES		(23,958)				138,858				NM			(27,374)				120,097				NM
Effect of exchange rates changes on cash and cash equivalents		6,841				9,210				(26)	%		(18,024)				(181)				NM
Net increase (decrease) in cash and cash equivalents		(30,539)				141,675				NM			1,510				159,418				(99)	%
Net cash and cash equivalents at beginning of period		520,060				436,506				19	%		488,011				418,763				17	%
Net cash and cash equivalents at end of period		$	489,521			$	578,181			(15)	%		$	489,521			$	578,181			(15)	%
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for taxes, net of refunds		$	(5,150)			$	(4,519)			14	%		$	(13,582)			$	(16,566)			(18)	%
Cash paid for interest		$	(369)			$	(317)			16	%		$	(736)			$	(666)			11	%
(1) Share-based compensation expense according to ASC 718 Compensation - stock compensation accounted for $11.2 million and $6.8 million of equity awards compensation expense for the quarter ended June  30, 2021 and 2020, respectively, and $18.0 million and $14.9 million of equity awards compensation for the six months ended June, 30, 2021 and 2020, respectively.

 

 

CRITEO S.A. Reconciliation of Cash from Operating Activities to Free Cash Flow (U.S. dollars in thousands, unaudited)
		Three Months Ended											Six Months Ended
		June 30,											June 30,
		2021				2020				YoY Change			2021				2020				YoY Change
CASH FROM OPERATING ACTIVITIES		$	26,360			$	33,377			(21)	%		$	103,722			$	90,120			15	%
Acquisition of intangible assets, property, plant and equipment		(15,663)				(29,471)				(47)	%		(27,616)				(40,729)				(32)	%
Change in accounts payable related to intangible assets, property, plant and equipment		2,535				10,939				(77)	%		708				10,460				(93)	%
FREE CASH FLOW (1)		$	13,232			$	14,845			(11)	%		$	76,814			$	59,851			28	%
(1) Free Cash Flow is defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment.

 

 

CRITEO S.A. Reconciliation of Revenue ex-TAC to Revenue (U.S. dollars in thousands, unaudited)
			Three Months Ended														Six Months Ended
			June 30,														June 30,
	Region		2021				2020				YoY Change			YoY Change at Constant Currency			2021				2020				YoY Change			YoY Change at Constant Currency
Revenue
	Americas		$	221,227			$	185,674			19	%		19	%		$	425,127			$	377,419			13	%		13	%
	EMEA		209,303				159,621				31	%		21	%		421,399				349,735				20	%		12	%
	Asia-Pacific		120,781				92,319				31	%		29	%		245,862				213,836				15	%		12	%
	Total		551,311				437,614				26	%		22	%		1,092,388				940,990				16	%		12	%
Traffic acquisition costs (1)
	Americas		(134,332)				(115,317)				16	%		16	%		(261,960)				(235,339)				11	%		12	%
	EMEA		(124,747)				(90,153)				38	%		27	%		(251,395)				(198,550)				27	%		17	%
	Asia-Pacific		(71,999)				(52,228)				38	%		36	%		(145,390)				(121,173)				20	%		17	%
	Total		(331,078)				(257,698)				28	%		24	%		(658,745)				(555,062)				19	%		15	%
Revenue ex-TAC (1)
	Americas		86,895				70,357				24	%		23	%		163,167				142,080				15	%		15	%
	EMEA		84,556				69,468				22	%		12	%		170,004				151,185				12	%		4	%
	Asia-Pacific		48,782				40,091				22	%		20	%		100,472				92,663				8	%		6	%
	Total		$	220,233			$	179,916			22	%		18	%		$	433,643			$	385,928			12	%		9	%
			Three Months Ended														Six Months Ended
			June 30,														June 30,
	Solution		2021				2020				YoY Change			YoY Change at Constant Currency			2021				2020				YoY Change			YoY Change at Constant Currency
Revenue
	Marketing Solutions		$	487,465			$	381,270			28	%		23	%		$	970,655			$	851,043			14	%		10	%
	Retail Media (2)		63,846				56,344				13	%		10	%		121,733				89,947				35	%		32	%
	Total		551,311				437,614				26	%		22	%		1,092,388				940,990				16	%		12	%
Traffic acquisition costs (1)
	Marketing Solutions		(294,132)				(218,990)				34	%		30	%		(585,005)				(492,047)				19	%		15	%
	Retail Media (2)		(36,946)				(38,708)				(5)	%		(7)	%		(73,740)				(63,015)				17	%		14	%
	Total		(331,078)				(257,698)				28	%		24	%		(658,745)				(555,062)				19	%		15	%
Revenue ex-TAC (1)
	Marketing Solutions		193,333				162,280				19	%		15	%		385,650				358,996				7	%		4	%
	Retail Media (2)		26,900				17,636				53	%		49	%		47,993				26,932				78	%		74	%
	Total		$	220,233			$	179,916			22	%		18	%		$	433,643			$	385,928			12	%		9	%
(1) We define Revenue ex-TAC as our revenue excluding traffic acquisition costs generated over the applicable measurement period. Revenue ex-TAC, Traffic Acquisition Costs, Revenue ex-TAC by Region and Revenue ex-TAC by Solution are not measures calculated in accordance with U.S. GAAP. We have included Revenue ex-TAC, Traffic Acquisition Costs,  Revenue ex-TAC by Region and Revenue ex-TAC by Solution because they are key measures used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the elimination of TAC from revenue and review of these measures by region and solution can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Revenue ex-TAC, Traffic Acquisition Costs, Revenue ex-TAC by Region, and Revenue ex-TAC by Solution provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Revenue ex-TAC, Traffic Acquisition Costs, Revenue ex-TAC by Region and Revenue ex-TAC by Solution has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; (b) other companies may report Revenue, Traffic Acquisition Costs,  Revenue ex-TAC by Region and Revenue ex-TAC by Solution, or similarly titled measures but define the regions, and product families differently, which reduces their effectiveness as a comparative measure; and (c) other companies may report Revenue ex-TAC or similarly titled measures but calculate them differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Revenue ex-TAC and Revenue, Traffic Acquisition Costs,  Revenue ex-TAC by Region and Revenue ex-TAC by Solution alongside our other U.S. GAAP financial results, including revenue. The above tables provide a reconciliation of Revenue ex-TAC to revenue, Revenue ex-TAC by Region to revenue by region and Revenue ex-TAC by Solution to revenue by solution.
(2) Criteo operates as one operating segment. From January 1, 2021 we have disaggregated revenues between Marketing Solutions and Retail Media.  A strategic building block of Criteo's Commerce Media Platform, the Retail Media Platform, introduced in June 2020, is a self-service solution providing transparency, measurement and control to brands and retailers. In all arrangements running on this platform, Criteo recognizes revenue on a net basis, whereas revenue from arrangements running on legacy Retail Media solutions are accounted for on a gross basis. Over time, we expect most clients using Criteo's legacy Retail Media solutions to transition to this platform. As new clients onboard and existing clients transition to the Retail Media Platform, Revenue may decline but Revenue ex-TAC margin will increase. Revenue ex-TAC will not be impacted by this transition.

 

 

CRITEO S.A. Reconciliation of Adjusted EBITDA to Net Income (U.S. dollars in thousands, unaudited)
		Three Months Ended											Six Months Ended
		June 30,											June 30,
		2021				2020				YoY Change			2021				2020				YoY Change
Net income		$	15,029			$	6,150			144	%		$	38,479			$	22,578			70	%
Adjustments:
Financial expense		519				1,003				(48)	%		1,237				1,337				(7)	%
Provision for income taxes		4,181				2,636				59	%		14,232				9,676				47	%
Equity awards compensation expense		11,669				7,159				63	%		19,551				15,662				25	%
Research and development		4,218				2,068				NM			6,714				4,438				51	%
Sales and operations		3,636				1,572				NM			6,005				5,190				16	%
General and administrative		3,815				3,519				8	%		6,832				6,034				13	%
Pension service costs		337				539				(37)	%		675				1,077				(37)	%
Research and development		175				269				(35)	%		350				538				(35)	%
Sales and operations		53				95				(44)	%		106				190				(44)	%
General and administrative		109				175				(38)	%		219				349				(37)	%
Depreciation and amortization expense		22,491				20,208				11	%		44,345				44,346				—	%
Cost of revenue		15,744				13,098				20	%		30,988				25,869				20	%
Research and development (1)		2,207				1,658				33	%		3,960				7,308				(46)	%
Sales and operations		3,702				4,221				(12)	%		7,656				8,561				(11)	%
General and administrative		838				1,231				(32)	%		1,741				2,608				(33)	%
Acquisition-related costs		3,047				—				NM			3,047				—				NM
General and administrative		3,047				—				NM			3,047				—				NM
Restructuring related and transformation costs (2)		9,996				1,216				NM			21,632				3,425				NM
Research and development		4,831				513				NM			6,267				1,508				NM
Sales and operations		1,551				415				NM			8,918				1,436				NM
General and administrative		3,614				288				NM			6,447				481				NM
Total net adjustments		52,240				32,761				59	%		104,719				75,523				39	%
Adjusted EBITDA (3)		$	67,269			$	38,911			73	%		$	143,198			$	98,101			46	%
(1) For the Six Months Ended June 30, 2020, the Company recognized an accelerated amortization expense for Manage technology due to a revised useful life in 2020 ($4.0 million in Research and development).
(2) For the Three Months and the Six Months Ended June 2021, and June 2020, respectively, the Company recognized restructuring related and transformation costs following its new organizational structure implemented to support its Commerce Media Platform strategy:

 

 

	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2021				2020				2021				2020
(Gain) from forfeitures of share-based compensation awards	—				—				(666)				—
Facilities related costs	9,721				807				16,337				1,794
Payroll related costs	(181)				409				4,971				1,631
Consulting costs related to transformation	456				—				990				—
Total restructuring related and transformation costs	$	9,996			$	1,216			$	21,632			$	3,425
For the three months ended June 30, 2021 and June 30, 2020, respectively, the cash outflows related to restructuring related and transformation costs were $10.3 million, and $2.1 million respectively, and were mainly comprised of payroll costs, broker and termination penalties related to real-estate facilities and other consulting fees.
(3) We define Adjusted EBITDA as our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity awards compensation expense, pension service costs, acquisition-related costs and restructuring related and transformation costs. Adjusted EBITDA is not a measure calculated in accordance with U.S. GAAP. We have included Adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short-term and long-term operational plans. In particular, we believe that the elimination of equity awards compensation expense, pension service costs, and restructuring related and transformation costs in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; (b) Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (c) Adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation; (d) Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and (e) other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Adjusted EBITDA alongside our U.S. GAAP financial results, including net income.

 

 

CRITEO S.A. Reconciliation from Non-GAAP Operating Expenses to Operating Expenses under GAAP (U.S. dollars in thousands, unaudited)
		Three Months Ended											Six Months Ended
		June 30,											June 30,
		2021				2020				YoY Change			2021				2020				YoY Change
Research and Development expenses		$	(41,915)			$	(31,247)			34	%		$	(73,612)			$	(68,762)			7	%
Equity awards compensation expense		4,218				2,068				NM			6,714				4,438				51	%
Depreciation and Amortization expense		2,207				1,658				33	%		3,960				7,308				(46)	%
Pension service costs		175				269				(35)	%		350				538				(35)	%
Restructuring related and transformation costs		4,831				513				NM			6,267				1,508				NM
Non GAAP - Research and Development expenses		(30,484)				(26,739)				14	%		(56,321)				(54,970)				2	%
Sales and Operations expenses		(80,751)				(75,781)				7	%		(160,105)				(160,755)				(0.4)	%
Equity awards compensation expense		3,636				1,572				NM			6,005				5,190				16	%
Depreciation and Amortization expense		3,702				4,221				(12)	%		7,656				8,561				(11)	%
Pension service costs		53				95				(44)	%		106				190				(44)	%
Restructuring related and transformation costs		1,551				415				NM			8,918				1,436				NM
Non GAAP - Sales and Operations expenses		(71,809)				(69,478)				3	%		(137,420)				(145,378)				(5)	%
General and Administrative expenses		(40,474)				(29,185)				39	%		(73,902)				(55,100)				34	%
Equity awards compensation expense		3,815				3,519				8	%		6,832				6,034				13	%
Depreciation and Amortization expense		838				1,231				(32)	%		1,741				2,608				(33)	%
Pension service costs		109				175				(38)	%		219				349				(37)	%
Acquisition-related costs		3,047				—				NM			3,047				—				NM
Restructuring related and transformation costs		3,614				288				NM			6,447				481				NM
Non GAAP - General and Administrative expenses		(29,051)				(23,972)				21	%		(55,616)				(45,628)				22	%
Total Operating expenses		(163,140)				(136,213)				20	%		(307,619)				(284,617)				8	%
Equity awards compensation expense		11,669				7,159				63	%		19,551				15,662				25	%
Depreciation and Amortization expense		6,747				7,110				(5)	%		13,357				18,477				(28)	%
Pension service costs		337				539				(37)	%		675				1,077				(37)	%
Acquisition-related costs		3,047				—				NM			3,047				—				NM
Restructuring related and transformation costs		9,996				1,216				NM			21,632				3,425				NM
Total Non GAAP Operating expenses (1)		$	(131,344)			$	(120,189)			9	%		$	(249,357)			$	(245,976)			1	%
(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,
		2021				2020				YoY Change			2021				2020				YoY Change
Equity awards compensation expense
Research and development		$	4,218			$	2,068			NM			$	6,714			$	4,438			51	%
Sales and operations		3,636				1,572				NM			6,005				5,190				16	%
General and administrative		3,815				3,519				8	%		6,832				6,034				13	%
Total equity awards compensation expense		11,669				7,159				63	%		19,551				15,662				25	%
Pension service costs
Research and development		175				269				(35)	%		350				538				(35)	%
Sales and operations		53				95				(44)	%		106				190				(44)	%
General and administrative		109				175				(38)	%		219				349				(37)	%
Total pension service costs		337				539				(37)	%		675				1,077				(37)	%
Depreciation and amortization expense
Cost of revenue		15,744				13,098				20	%		30,988				25,869				20	%
Research and development		2,207				1,658				33	%		3,960				7,308				(46)	%
Sales and operations		3,702				4,221				(12)	%		7,656				8,561				(11)	%
General and administrative		838				1,231				(32)	%		1,741				2,608				(33)	%
Total depreciation and amortization expense		22,491				20,208				11	%		44,345				44,346				—	%
Acquisition-related costs
General and administrative		3,047				—				NM			3,047				—				NM
Total acquisition-related costs		3,047				—				NM			3,047				—				NM
Restructuring related and transformation costs
Research and development		4,831				513				NM			6,267				1,508				NM
Sales and operations		1,551				415				NM			8,918				1,436				NM
General and administrative		3,614				288				NM			6,447				481				NM
Total restructuring related and transformation costs		$	9,996			$	1,216			NM			$	21,632			$	3,425			NM

 

 

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,
		2021				2020				YoY Change			2021				2020				YoY Change
Net income		$	15,029			$	6,150			144	%		$	38,479			$	22,578			70	%
Adjustments:
Equity awards compensation expense		11,669				7,159				63	%		19,551				15,662				25	%
Amortization of acquisition-related intangible assets (1)		2,936				2,847				3	%		5,871				9,695				(39)	%
Acquisition-related costs		3,047				—				NM			3,047				—				NM
Restructuring related and transformation costs		9,996				1,216				NM			21,632				3,425				NM
Tax impact of the above adjustments		(1,821)				(665)				NM			(4,572)				(2,625)				74	%
Total net adjustments		25,827				10,557				NM			45,529				26,157				74	%
Adjusted net income (2)		$	40,856			$	16,707			145	%		$	84,008			$	48,735			72	%
Weighted average shares outstanding
- Basic		60,663,301				61,415,467							60,702,780				61,553,875
- Diluted		64,665,212				61,790,135							64,371,603				61,958,499
Adjusted net income per share
- Basic		$	0.67			$	0.27			148	%		$	1.38			$	0.79			75	%
- Diluted		$	0.63			$	0.27			133	%		$	1.31			$	0.79			66	%
(1) For the Six Months Ended June 30, 2020, the Company recognized an accelerated amortization expense for Manage technology due to a revised useful life in 2019 ($4.0 million in Research and development).
(2) We define Adjusted Net Income as our net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related intangible assets, acquisition-related costs, restructuring related and transformation costs, and the tax impact of the foregoing adjustments. Adjusted Net Income is not a measure calculated in accordance with U.S. GAAP. We have included Adjusted Net Income because it is a key measure used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the elimination of equity awards compensation expense, amortization of acquisition-related intangible assets, restructuring related and transformation costs and the tax impact of the foregoing adjustments in calculating Adjusted Net Income can provide a useful measure for period-to-period comparisons of our business. Accordingly, we believe that Adjusted Net Income provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Adjusted Net Income has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) Adjusted Net Income does not reflect the potentially dilutive impact of equity-based compensation or the impact of certain acquisition-related costs; and (b) other companies, including companies in our industry, may calculate Adjusted Net Income or similarly titled measures differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Adjusted Net Income alongside our other U.S. GAAP-based financial results, including net income.

 

 

CRITEO S.A. Constant Currency Reconciliation (U.S. dollars in thousands, unaudited)
		Three Months Ended							Six Months Ended
		June 30,							June 30,
		2021		2020		YoY Change			2021		2020		YoY Change
Revenue as reported		$551,311		$437,614		26	%		$1,092,388		$940,990		16	%
Conversion impact U.S. dollar/other currencies		(18,569)							(35,316)
Revenue at constant currency(1)		532,742		437,614		22	%		1,057,072		940,990		12	%
Traffic acquisition costs as reported		(331,078)		(257,698)		28	%		(658,745)		(555,062)		19	%
Conversion impact U.S. dollar/other currencies		11,283							21,600
Traffic Acquisition Costs at constant currency(1)		(319,795)		(257,698)		24	%		(637,145)		(555,062)		15	%
Revenue ex-TAC as reported(2)		220,233		179,916		22	%		433,643		385,928		12	%
Conversion impact U.S. dollar/other currencies		(7,285)							(13,715)
Revenue ex-TAC at constant currency(2)		212,948		179,916		18	%		419,928		385,928		9	%
Revenue ex-TAC(2)/Revenue as reported		40%		41%					40%		41%
Other cost of revenue as reported		(37,364)		(33,914)		10	%		(72,076)		(67,720)		6	%
Conversion impact U.S. dollar/other currencies		559							881
Other cost of revenue at constant currency(1)		(36,805)		(33,914)		9	%		(71,195)		(67,720)		5	%
Adjusted EBITDA(3)		67,269		38,911		73	%		143,198		98,101		46	%
Conversion impact U.S. dollar/other currencies		(4,433)							(9,024)
Adjusted EBITDA(3) at constant currency(1)		$62,836		$38,911		61	%		$134,174		$98,101		37	%
Adjusted EBITDA(3)/Revenue ex-TAC(2)		31%		22%					33%		25%
(1) Information herein with respect to results presented on a constant currency basis is computed by applying prior period average exchange rates to current period results. We have included results on a constant currency basis because it is a key measure used by our management and board of directors to evaluate operating performance. Management reviews and analyzes business results excluding the effect of foreign currency translation because they believe this better represents our underlying business trends. The table above reconciles the actual results presented in this section with the results presented on a constant currency basis.
(2) Revenue ex-TAC is not a measure calculated in accordance with U.S. GAAP. See the table entitled "Reconciliation of Revenue ex-TAC to Revenue" for a reconciliation of Revenue Ex-TAC to revenue.
(3) Adjusted EBITDA is not a measure calculated in accordance with U.S. GAAP. See the table entitled "Reconciliation of Adjusted EBITDA to Net Income" for a reconciliation of Adjusted EBITDA to net income.

 

 

CRITEO S.A. Information on Share Count (unaudited)
		Six Months Ended
		2021			2020
Shares outstanding as at January 1,		60,639,570			62,293,508
Weighted average number of shares issued during the period		63,210			(739,633)
Basic number of shares - Basic EPS basis		60,702,780			61,553,875
Dilutive effect of share options, warrants, employee warrants - Treasury method		3,668,823			404,624
Diluted number of shares - Diluted EPS basis		64,371,603			61,958,499
Shares issued as June 30, before Treasury stocks		66,697,360			66,204,881
Treasury stock as of June 30,		(6,080,008)			(5,589,408)
Shares outstanding as of June 30, after Treasury stocks		60,617,352			60,615,473
Total dilutive effect of share options, warrants, employee warrants		8,438,680			8,341,925
Fully diluted shares as at June 30,		69,056,032			68,957,398

 

 

CRITEO S.A. Supplemental Financial Information and Operating Metrics (U.S. dollars in thousands except where stated, unaudited)
	YoY Change	QoQ Change	Q2 2021	Q1 2021	Q4 2020	Q3 2020	Q2 2020	Q1 2020	Q4 2019	Q3 2019	Q2 2019
Clients	5%	3%	21,332	20,626	21,460	20,565	20,359	20,360	20,247	19,971	19,733
Revenue	26%	2%	551,311	541,077	661,282	470,345	437,614	503,376	652,640	522,606	528,147
Americas	19%	8%	221,227	203,900	312,817	204,618	185,674	191,745	306,250	213,937	213,974
EMEA	31%	(1)%	209,303	212,096	232,137	167,800	159,621	190,114	216,639	185,556	194,359
APAC	31%	(3)%	120,781	125,081	116,328	97,927	92,319	121,517	129,751	123,113	119,814
Revenue	26%	2%	551,311	541,077	661,282	470,345	437,614	503,376	N.A	N.A	N.A
Marketing Solutions	28%	1%	487,465	483,190	543,262	412,126	381,270	469,773	N.A	N.A	N.A
Retail Media	13%	10%	63,846	57,887	118,020	58,219	56,344	33,603	N.A	N.A	N.A
TAC	28%	1%	(331,078)	(327,667)	(408,108)	(284,401)	(257,698)	(297,364)	(386,388)	(301,901)	(304,229)
Americas	16%	5%	(134,332)	(127,628)	(203,341)	(130,756)	(115,317)	(120,022)	(189,092)	(129,047)	(129,491)
EMEA	38%	(2)%	(124,747)	(126,648)	(137,384)	(97,272)	(90,153)	(108,397)	(124,939)	(103,899)	(107,401)
APAC	38%	(2)%	(71,999)	(73,391)	(67,383)	(56,373)	(52,228)	(68,945)	(72,357)	(68,955)	(67,337)
TAC	28%	1%	(331,078)	(327,667)	(408,108)	(284,401)	(257,698)	(297,364)	N.A	N.A	N.A
Marketing Solutions	34%	1%	(294,132)	(290,873)	(324,017)	(243,616)	(218,990)	(273,057)	N.A	N.A	N.A
Retail Media	(5)%	—%	(36,946)	(36,794)	(84,091)	(40,785)	(38,708)	(24,307)	N.A	N.A	N.A
Revenue ex-TAC (1)	22%	3%	220,233	213,410	253,174	185,944	179,916	206,012	266,252	220,705	223,918
Americas	24%	14%	86,895	76,272	109,476	73,862	70,357	71,723	117,158	84,890	84,483
EMEA	22%	(1)%	84,556	85,448	94,753	70,528	69,468	81,717	91,700	81,657	86,958
APAC	22%	(6)%	48,782	51,690	48,945	41,554	40,091	52,572	57,394	54,158	52,477
Revenue ex-TAC (1)	22%	3%	220,233	213,410	253,174	185,944	179,916	206,012	N.A	N.A	N.A
Marketing Solutions	19%	1%	193,333	192,317	219,245	168,510	162,280	196,716	N.A	N.A	N.A
Retail Media	53%	28%	26,900	21,093	33,929	17,434	17,636	9,296	N.A	N.A	N.A
Cash flow from operating activities	(21)%	(66)%	26,360	77,362	44,080	51,156	33,377	56,743	59,359	43,289	52,964
Capital expenditures	(29)%	(5)%	13,128	13,780	22,302	12,898	18,532	11,737	17,520	23,944	32,792
Capital expenditures/Revenue	N.A	N.A	2%	3%	3%	3%	4%	2%	3%	5%	6%
Net cash position	(15)%	(6)%	489,521	520,060	488,011	626,744	578,181	436,506	418,763	409,178	422,053
Headcount	(4)%	2%	2,572	2,532	2,594	2,636	2,685	2,701	2,755	2,794	2,873
Days Sales Outstanding (days - end of month)	N.A	N.A	66	64	56	62	61	62	52	57	58
(1) We define Revenue ex-TAC as our revenue excluding traffic acquisition costs generated over the applicable measurement period. Revenue ex-TAC, Traffic Acquisition Costs, Revenue ex-TAC by Region and Revenue ex-TAC by Solution are not measures calculated in accordance with U.S. GAAP. We have included Revenue ex-TAC, Traffic Acquisition Costs,  Revenue ex-TAC by Region and Revenue ex-TAC by Solution because they are key measures used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the elimination of TAC from revenue and review of these measures by region and solution can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Revenue ex-TAC, Traffic Acquisition Costs, Revenue ex-TAC by Region, and Revenue ex-TAC by Solution provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Revenue ex-TAC, Traffic Acquisition Costs, Revenue ex-TAC by Region and Revenue ex-TAC by Solution has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; (b) other companies may report Revenue, Traffic Acquisition Costs,  Revenue ex-TAC by Region and Revenue ex-TAC by Solution, or similarly titled measures but define the regions, and product families differently, which reduces their effectiveness as a comparative measure; and (c) other companies may report Revenue ex-TAC or similarly titled measures but calculate them differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Revenue ex-TAC and Revenue, Traffic Acquisition Costs,  Revenue ex-TAC by Region and Revenue ex-TAC by Solution alongside our other U.S. GAAP financial results, including revenue. The above tables provide a reconciliation of Revenue ex-TAC to revenue, Revenue ex-TAC by Region to revenue by region and Revenue ex-TAC by Solution to revenue by solution.

 

 

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SOURCE Criteo S.A.

FAQ

What were Criteo's Q2 2021 financial results?

Criteo reported revenue of $551 million for Q2 2021, a 26% increase year-over-year, with a net income of $15 million.

How did Criteo's diluted EPS perform in Q2 2021?

Criteo's diluted EPS for Q2 2021 was $0.23, reflecting a 156% increase compared to the previous year.

What is Criteo's cash flow situation as of Q2 2021?

Criteo's cash flow from operating activities was $26 million, down 21% year-over-year, with cash and equivalents totaling $490 million.

What are Criteo's growth prospects following the Q2 2021 results?

Criteo's growth prospects appear strong, driven by a 22% increase in revenue ex-TAC and the acquisition of Mabaya.

How did Criteo's revenue ex-TAC perform in Q2 2021?

Revenue ex-TAC grew by 22% to $220 million in Q2 2021, representing 40% of total revenue.