CRITEO REPORTS STRONG FOURTH QUARTER AND FISCAL YEAR 2021 RESULTS

Rhea-AI Summary

Criteo S.A. (NASDAQ: CRTO) announced its Q4 and FY 2021 financial results, exceeding guidance with revenue of $653 million in Q4, slightly down from $661 million a year prior, while total revenue for 2021 reached $2.254 billion, up 9% year-over-year. Gross profit increased 12% to $244 million in Q4 and 14% for the year, totaling $782 million. Net income surged 60% to $75 million in Q4 and 84% to $138 million for the year. The company also highlighted a significant growth in Retail Media, with a 58% increase in contribution ex-TAC for the year. Criteo is set to acquire IPONWEB for $380 million to enhance its Commerce Media Platform.

Positive

• Revenue increased 9% YoY to $2,254 million for FY 2021.
• Net income rose by 84% YoY to $138 million in FY 2021.
• Gross profit margin improved to 35% in FY 2021, up from 33% in FY 2020.
• Retail Media contribution ex-TAC grew 58% YoY in 2021.

Negative

• Q4 2021 revenue decreased by 1% YoY, causing concern about potential growth challenges.
• Retail Media revenue down 36% YoY due to ongoing client migration to the Retail Media Platform.

NEW YORK, Feb. 9, 2022 /PRNewswire/ -- Criteo S.A. (NASDAQ: CRTO) ("Criteo" or the "Company"), the global technology company that provides the world's leading Commerce Media Platform, today announced financial results for the fourth quarter and fiscal year ended December 31, 2021 that exceeded the Company's guidance.

Fourth Quarter and Fiscal Year 2021 Financial Highlights:

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

	Three Months Ended												Twelve Months Ended
	December 31,												December 31,
	2021				2020				YoY Change				2021				2020			YoY Change
									(in millions, except EPS data)
GAAP Results
Revenue	$	653			$	661			(1)		%		$	2,254			$	2,073		9	%
Gross Profit	$	244			$	218			12		%		$	782			$	688		14	%
Net Income	$	75			$	47			60		%		$	138			$	75		84	%
Gross Profit margin		37	%			33	%		4ppt					35	%			33     %		2ppt
Diluted EPS	$	1.15			$	0.73			58		%		$	2.09			$	1.16		80	%
Cash from operating activities	$	66			$	44			50		%		$	221			$	185		19	%
Cash and cash equivalents	$	516			$	488			6		%		$	516			$	488		6	%
Non-GAAP Results1
Contribution ex-TAC	$	276			$	253			9		%		$	921			$	825		12	%
Contribution ex-TAC margin		42	%			38	%		4ppt					41	%			40     %		1ppt
Adjusted EBITDA	$	111			$	103			7		%		$	322			$	251		28	%
Adjusted diluted EPS	$	1.44			$	0.98			47		%		$	3.38			$	2.17		56	%
Free Cash Flow (FCF)	$	56			$	22			157		%		$	168			$	120		40	%
FCF / Adjusted EBITDA		50	%			21	%		29ppt					52	%			48     %		4ppt

 

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

Operating Highlights

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

___________________________________________________

1 Contribution ex-TAC, Contribution ex-TAC margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted diluted EPS and Free Cash Flow are not measures calculated in accordance with U.S. GAAP. 2 Constant currency measures exclude the impact of foreign currency fluctuations and is computed by applying the 2020 average exchange rates for the relevant period to 2021 figures. 3 Same-client profitability or Contribution ex-TAC is the profitability or Contribution ex-TAC generated by clients that were live with us in a given quarter and still live with us the same quarter in the following year. 4 Activated media spend is defined as the sum of our Marketing Solutions revenue and the media spend activated on behalf of our Retail Media clients.

 

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

New Reporting Segment Structure

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

Change in Naming of Non-GAAP Financial Measure

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

Financial Summary

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

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

Fourth Quarter 2021 Results

Revenue, Gross Profit and Contribution ex-TAC

Revenue decreased by 1% year-over-year in Q4 2021, or increased by 1% at constant currency, to $653 million (Q4 2020: $661 million). Gross profit increased by 12% year-over-year in Q4 2021, or 14% at constant currency, to $244 million (Q4 2020: $218 million). Gross profit as a percentage of revenue, or gross profit margin, was 37% (Q4 2020: 33%). Contribution ex-TAC in the fourth quarter increased 9% year-over-year, or 11% at constant currency, to $276 million (Q4 2020: $253 million). Contribution ex-TAC as a percentage of revenue, or Contribution ex-TAC margin, was 42% (Q4 2020: 38%), up 400 basis points year-over-year, largely driven by Retail Media and the acceleration of our client transition to the Retail Media Platform.

• Marketing Solutions revenue grew 6% (or 9% at constant currency) and Marketing Solutions Contribution ex-TAC grew 4% (or 7% at constant currency), driven by healthy demand from Retail clients, both on our retargeting and audience targeting solutions, partially offset by anticipated identity and privacy changes.
• Retail Media revenue decreased 36% (or 36% at constant currency) reflecting the impact related to the ongoing client migration to our Retail Media Platform ("RMP"). Retail Media Contribution ex-TAC increased 41% (or 41% on a constant currency basis), driven by continued strength in Retail Media onsite, new client integrations and growing network effects of the RMP.

Net Income and Adjusted Net Income

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

Adjusted net income, or net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related intangible assets, acquisition-related costs, restructuring related and transformation costs and the tax impact of these adjustments, was $92 million, or $1.44 per share on a diluted basis (Q4 2020: $61 million, or $0.98 per share on a diluted basis).

Adjusted EBITDA and Operating Expenses

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

Operating expenses increased 18% year-over-year to $179 million (Q4 2020: $151 million), reflecting investments in our growth areas, including Product, Sales and R&D, and higher equity award compensation expense balanced with disciplined and effective expense management. Operating expenses, excluding the impact of equity awards compensation expense, pension costs, acquisition-related costs, restructuring related and transformation costs, and depreciation and amortization, which we refer to as Non-GAAP operating expenses, increased by 16% or $21 million, to $151 million (Q4 2020: $130 million).

Fiscal Year 2021 Results

Revenue, Gross Profit and Contribution ex-TAC

Revenue increased 9% year-over-year (8% at constant currency), to $2,254 million (FY 2020: $2,073 million). Gross profit increased by 14% year-over-year in 2021, or 13% at constant currency, to $782 million (FY 2020: $688 million). Gross profit as a percentage of revenue, or gross profit margin, was 35% (FY 2020: 33%). Contribution ex-TAC increased 12% year-over-year (11% at constant currency), to $921 million (FY 2020: $825 million). Contribution ex-TAC as a percentage of revenue, or Contribution ex-TAC margin, was 41% (FY 2020: 40%), up 100 basis points year-over-year, largely driven by Retail Media and the acceleration of our client transition to the Retail Media Platform.

• Marketing Solutions revenue grew 11% (or 10% at constant currency) and Marketing Solutions Contribution ex-TAC grew 7% (or 6% at constant currency), driven by healthy demand from Retail clients, both on our retargeting and audience targeting solutions, partially offset by anticipated identity and privacy changes.
• Retail Media revenue decreased 7% (or 8% at constant currency) reflecting the impact related to the ongoing client migration to our Retail Media Platform ("RMP"). Retail Media Contribution ex-TAC increased 59% (or 58% on a constant currency basis), driven by continued strength in Retail Media onsite, new client integrations and growing network effects of the RMP.

Net Income and Adjusted Net Income

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

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

Adjusted EBITDA and Operating Expenses

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

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

Cash Flow, Cash and Financial Liquidity Position

Cash flow from operating activities increased 50% year-over-year to $66 million in Q4 2021 (Q4 2020: $44 million) and grew 19% to $221 million in 2021 (fiscal year 2020: $185 million).

Free Cash Flow, defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment, increased 157% to $56 million in Q4 2021 (Q4 2020: $22 million), and grew 40% in 2021 to $168 million (fiscal year 2020: $120 million), driving a Free Cash Flow conversion rate of 52% of Adjusted EBITDA in 2021 (fiscal year 2020: 48%).

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

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

IPONWEB Acquisition

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

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

2022 Business Outlook

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

Fiscal year 2022 guidance:

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

First quarter 2022 guidance:

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

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

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

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

Extension of Share Repurchase Authorization from $175 million to $280 million

Criteo continues to execute on its strategic plan and Company transformation, investing in the growth of the business and leveraging its strong balance sheet position.

Criteo today announces that the board of directors has authorized the extension of its current share repurchase program of up to $175 million of the Company's outstanding American Depositary Shares to an increased amount of up to $280 million. The Company intends to use repurchased shares under this extended program to satisfy employee equity obligations in lieu of issuing new shares, which would limit future dilution for its shareholders, as well as to fund potential acquisitions in the future.

Under the terms of the authorization, the stock purchases may be made from time to time on the Nasdaq Global Select Market in compliance with applicable state and federal securities laws and applicable provisions of French corporate law. The timing and amounts of any purchases will be based on market conditions and other factors including price, regulatory requirements and capital availability, as determined by Criteo's management team. The program does not require the purchase of any minimum number of shares and may be suspended, modified or discontinued at any time without prior notice.

Non-GAAP Financial Measures

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

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

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

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

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

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

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

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

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

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

Forward-Looking Statements Disclosure

This press release contains forward-looking statements, including projected financial results for the quarter ending March 31, 2022 and the year ended December 31, 2022, our expectations regarding our market opportunity and future growth prospects and other statements that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to: failure related to our technology and our ability to innovate and respond to changes in technology, uncertainty regarding the scope and impact of the COVID-19 pandemic on our employees, operations, revenue and cash flows, uncertainty regarding our ability to access a consistent supply of internet display advertising inventory and expand access to such inventory, including without limitation uncertainty regarding the timing and scope of proposed changes to and enhancements of the Chrome browser announced by Google, investments in new business opportunities and the timing of these investments, whether the projected benefits of acquisitions materialize as expected, including the successful completion of our acquisition of IPONWEB, uncertainty regarding international growth and expansion (including related to changes in a specific country's or region's political or economic conditions), the impact of competition, uncertainty regarding legislative, regulatory or self-regulatory developments regarding data privacy matters and the impact of efforts by other participants in our industry to comply therewith, the impact of consumer resistance to the collection and sharing of data, our ability to access data through third parties, failure to enhance our brand cost-effectively, recent growth rates not being indicative of future growth, our ability to manage growth, potential fluctuations in operating results, our ability to grow our base of clients, and the financial impact of maximizing Contribution ex-TAC, as well as risks related to future opportunities and plans, including the uncertainty of expected future financial performance and results and those risks detailed from time-to-time under the caption "Risk Factors" and elsewhere in the Company's SEC filings and reports, including the Company's Annual Report on Form 10-K filed with the SEC on February 26, 2021, and in subsequent Quarterly Reports on Form 10-Q as well as future filings and reports by the Company. Importantly, at this time, the COVID-19 pandemic continues to have an impact on Criteo's business, financial condition, cash flow and results of operations. There are significant uncertainties about the duration and the extent of the impact of the COVID-19 pandemic.

Except as required by law, the Company undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events, changes in expectations or otherwise.

Conference Call Information

Criteo's senior management team will discuss the Company's earnings on a call that will take place today, February 9, 2022, at 8:00 AM ET, 2:00 PM CET. The conference call will be webcast live on the Company's website http://ir.criteo.com and will subsequently be available for replay.

U.S. callers:		+1 855 209 8212
International callers:		+1 412 317 0788 or +33 1 76 74 05 02

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

About Criteo

Criteo (NASDAQ: CRTO) is the global technology company that provides the world's leading Commerce Media Platform. 2,800 Criteo team members partner with 22,000 marketers and thousands of media owners around the globe to activate the world's largest set of commerce data to drive better commerce outcomes. By powering trusted and impactful advertising, Criteo brings richer experiences to every consumer while supporting a fair and open internet that enables discovery, innovation and choice. For more information, please visit www.criteo.com.

Contacts

Criteo Investor Relations
Edouard Lassalle, SVP, Capital Markets & Investor Relations, e.lassalle@criteo.com
Melanie Dambre, Director, Investor Relations, m.dambre@criteo.com

Criteo Public Relations
Maribel Henriquez, Senior Communications Manager, m.henriquez@criteo.com

Financial information to follow

 

CRITEO S.A.
Consolidated Statement of Financial Position
(U.S. dollars in thousands, unaudited)
		December 31, 2021			December 31, 2020
Assets
Current assets:
Cash and cash equivalents		$	515,527		$	488,011
Trade receivables, net of allowances of $45.4 million and $39.9 million at December 31, 2021 and December 31, 2020, respectively			581,988			474,055
Income taxes			8,784			11,092
Other taxes			73,388			69,987
Other current assets			34,182			21,405
Marketable securities - current portion			50,299			—
Total current assets			1,264,168			1,064,550
Property, plant and equipment, net			139,961			189,505
Intangible assets, net			82,627			79,744
Goodwill			329,699			325,805
Right of Use Asset - operating lease			120,257			114,012
Marketable securities - non current portion			5,000			41,809
Non-current financial assets			6,436			18,109
Deferred tax assets			35,443			19,876
Total non-current assets			719,423			788,860
Total assets		$	1,983,591		$	1,853,410
Liabilities and shareholders' equity
Current liabilities:
Trade payables		$	430,245		$	367,025
Contingencies			3,059			2,250
Income taxes			6,641			2,626
Financial liabilities - current portion			642			2,889
Lease liability - operating - current portion			34,066			48,388
Other taxes			60,236			58,491
Employee - related payables			98,136			85,272
Other current liabilities			39,523			33,390
Total current liabilities			672,548			600,331
Deferred tax liabilities			3,053			5,297
Defined benefit plans			5,531			6,167
Financial liabilities - non current portion			360			386
Lease liability - operating - non current portion			93,893			83,007
Other non-current liabilities			9,886			5,535
Total non-current liabilities			112,723			100,392
Total liabilities			785,271			700,723
Commitments and contingencies
Shareholders' equity:
Common shares, €0.025 par value, 65,883,347 and 66,272,106 shares authorized, issued and outstanding at December 31, 2021 and December 31, 2020, respectively.			2,149			2,161
Treasury stock, 5,207,873 and  5,632,536 shares at cost as of December 31, 2021 and December 31, 2020, respectively.			(131,560)			(85,570)
Additional paid-in capital			731,248			693,164
Accumulated other comprehensive income (loss)			(40,294)			16,028
Retained earnings			601,588			491,359
Equity - attributable to shareholders of Criteo S.A.			1,163,131			1,117,142
Non-controlling interests			35,189			35,545
Total equity			1,198,320			1,152,687
Total equity and liabilities		$	1,983,591		$	1,853,410

 

 

CRITEO S.A.
Consolidated Statement of Income
(U.S. dollars in thousands, except share and per share data, unaudited)
		Three Months Ended						Twelve Months Ended
		December 31,						December 31,
		2021		2020		YoY Change		2021		2020		YoY Change
Revenue		$   653,267		$   661,282		(1)     %		$  2,254,235		$  2,072,617		9    %
Cost of revenue
Traffic acquisition cost		(377,076)		(408,108)		(8)     %		(1,333,440)		(1,247,571)		7    %
Other cost of revenue		(31,840)		(34,700)		(8)     %		(138,851)		(137,028)		1    %
Gross profit		244,351		218,474		12      %		781,944		688,018		14      %
Operating expenses:
Research and development expenses		(44,860)		(32,797)		37      %		(151,817)		(132,513)		15     %
Sales and operations expenses		(89,892)		(85,871)		5      %		(325,616)		(330,285)		(1)     %
General and administrative expenses		(43,855)		(32,623)		34      %		(152,634)		(116,395)		31     %
Total Operating expenses		(178,607)		(151,291)		18      %		(630,067)		(579,193)		9     %
Income from operations		65,744		67,183		(2)      %		151,877		108,825		40     %
Financial and Other income (expense)		3,330		(111)		NM		1,939		(1,939)		NM
Income before taxes		69,074		67,072		3      %		153,816		106,886		44     %
Provision for income taxes		5,864		(20,254)		NM		(16,169)		(32,197)		(50)     %
Net Income		$      74,938		$      46,818		60      %		$   137,647		$      74,689		84     %
Net income available to shareholders of Criteo S.A.		$      73,765		$      45,277		63      %		$   134,456		$      71,679		88    %
Net income available to non-controlling interests		$        1,173		$        1,541		(24)      %		$        3,191		$        3,010		6    %
Weighted average shares outstanding used in computing per share amounts:
Basic		60,590,826		60,336,486				60,717,446		60,876,480
Diluted		63,985,850		62,348,489				64,231,637		61,818,593
Net income allocated to shareholders per share:
Basic		$          1.22		$          0.75		63      %		$          2.21		$          1.18		87      %
Diluted		$          1.15		$          0.73		58      %		$          2.09		$          1.16		80      %

 

 

CRITEO S.A.
Consolidated Statement of Cash Flows
(U.S. dollars in thousands, unaudited)
		Three Months Ended										Twelve Months Ended
		December 31,										December 31,
		2021				2020			YoY Change			2021			2020			YoY Change
Net income		$	74,938			$	46,818		60	%		$	137,647		$	74,689		84	%
Non-cash and non-operating items			21,306				48,887		(56)	%			124,879			154,629		(19)	%
- Amortization and provisions			23,015				26,960		(15)	%			90,934			106,591		(15)	%
- Equity awards compensation expense (1)			12,354				6,305		96	%			44,528			28,770		55	%
- Net gain or (loss) on disposal of non-current assets			(2,729)				(20)		NM				1,965			2,714		(28)	%
- Change in deferred taxes			(23,210)				11,417		NM				(18,642)			3,720		NM
- Change in income taxes			11,863				3,456		NM				6,043			10,867		(44)	%
- Other			13				769		(98)	%			51			1,967		(97)	%
Changes in working capital related to operating activities			(30,232)				(51,625)		(41)	%			(41,613)			(43,962)		(5)	%
- (Increase) / Decrease in trade receivables			(151,604)				(126,486)		20	%			(134,950)			(3,957)		NM
- Increase / (Decrease) in trade payables			88,384				61,989		43	%			82,691			(33,314)		NM
- (Increase) / Decrease in other current assets			(7,032)				(9,476)		(26)	%			(19,742)			(7,188)		NM
- Increase / (Decrease) in other current liabilities			38,807				26,406		47	%			33,033			6,261		NM
- Change in operating lease liabilities and right of use assets			1,213				(4,058)		NM				(2,645)			(5,764)		(54)	%
CASH FROM OPERATING ACTIVITIES			66,012				44,080		50	%			220,913			185,356		19	%
Acquisition of intangible assets, property, plant and equipment			(10,600)				(10,250)		3	%			(54,983)			(67,287)		(18)	%
Change in accounts payable related to intangible assets, property, plant and equipment			455				(12,052)		NM				1,973			1,818		9	%
Payment for businesses, net of cash acquired			(892)				(1,173)		(24)	%			(10,419)			(1,176)		NM
Change in other non-current financial assets			865				(13,819)		NM				(12,938)			(34,448)		(62)
CASH USED FOR INVESTING ACTIVITIES			(10,172)				(37,294)		(73)	%			(76,367)			(101,093)		(24)	%
Proceeds from borrowings under line-of-credit agreement			—				(4,315)		NM				—			153,188		NM
Repayment of borrowings			13				(167,163)		NM				(1,249)			(167,344)		(99)	%
Proceeds from exercise of stock options			3,508				1,626		NM				25,196			1,727		NM
Repurchase of treasury stocks			(27,416)				—		NM				(100,027)			(43,655)		NM
Change in other financial liabilities			(401)				347		NM				(4,037)			(1,663)		NM
CASH USED FOR  FINANCING ACTIVITIES			(24,296)				(169,505)		(86)				(80,117)			(57,747)		39	%
Effect of exchange rates changes on cash and cash equivalents			(13,475)				23,986		NM				(36,913)			42,732		NM
Net increase in cash and cash equivalents			18,069				(138,733)		NM				27,516			69,248		(60)	%
Net cash and cash equivalents at beginning of period			497,458				626,744		(21)				488,011			418,763		17	%
Net cash and cash equivalents at end of period		$	515,527			$	488,011		6	%		$	515,527		$	488,011		6	%
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for taxes, net of refunds		$	(5,482)			$	(5,381)		2	%		$	(28,767)		$	(17,610)		63
Cash paid for interest		$	(347)			$	(1,336)		(74)	%		$	(1,486)		$	(2,155)		(31)
(1) Share-based compensation expense according to ASC 718 Compensation - stock compensation accounted for $11.9 million and $5.7 million of equity awards compensation expense for the quarter ended December 31, 2021 and 2020, respectively, and $42.7 million and $27.1 million of equity awards compensation for the twelve months ended December, 31, 2021 and 2020, respectively.

 

 

CRITEO S.A.
Reconciliation of Cash from Operating Activities to Free Cash Flow
(U.S. dollars in thousands, unaudited)
		Three Months Ended									Twelve Months Ended
		December 31,									December 31,
		2021			2020			YoY Change			2021			2020			YoY Change
CASH FROM OPERATING ACTIVITIES		$	66,012		$	44,080		50	%		$	$ 220,913		$	185,356		19	%
Acquisition of intangible assets, property, plant and equipment			(10,600)			(10,250)		3	%			(54,983)			(67,287)		(18)	%
Change in accounts payable related to intangible assets, property, plant and equipment			455			(12,052)		NM				1,973			1,818		9	%
FREE CASH FLOW (1)		$	55,867		$	21,778		157	%		$	$ 167,903		$	119,887		40	%
(1) Free Cash Flow is defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment.

 

 

CRITEO S.A.
Reconciliation of Contribution ex-TAC to Gross Profit
(U.S. dollars in thousands, unaudited)
		Three Months Ended												Twelve Months Ended
		December 31,												December 31,
		2021			2020			YoY Change			YoY Change at Constant Currency			2021			2020			YoY Change			YoY Change at Constant Currency
Gross Profit			244,351			218,474		12	%		14	%			781,944			688,018		14	%		13	%
Other Cost of Revenue			31,840			34,700		(8)	%		(6)	%			138,851			137,028		1	%		2	%
Contribution ex-TAC (1)		$	276,191		$	253,174		9	%		11	%		$	920,795		$	825,046		12	%		11	%

 

 

(1) We define Contribution ex-TAC as our gross profit plus other costs of revenue generated over the applicable measurement period. Contribution ex-TAC is not a measure calculated in accordance with U.S. GAAP. We have included Contribution ex-TAC because it is a key measure used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that this measure can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Contribution ex-TAC provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Contribution ex-TAC has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; (b) other companies may report Contribution ex-TAC or similarly titled measures but calculate them differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Contribution ex-TAC alongside our other U.S. GAAP financial result measures. The above table provides a reconciliation of Contribution ex-TAC to gross profit.

 

 

	CRITEO S.A.
	Segment Information
	(U.S. dollars in thousands, unaudited)
			Three Months Ended												Twelve Months Ended
			December 31,												December 31,
	Segment		2021			2020			YoY Change			YoY Change at Constant Currency			2021			2020			YoY Change			YoY Change at Constant Currency
Revenue
	Marketing Solutions		$	577,962		$	543,262		6	%		9	%		$	2,007,239		$	1,806,431		11	%		10	%
	Retail Media (2)			75,305			118,020		(36)	%		(36)	%			246,996			266,186		(7)	%		(8)	%
	Total			653,267			661,282		(1)	%		1	%			2,254,235			2,072,617		9	%		8	%
Contribution ex-TAC
	Marketing Solutions			228,378			219,245		4	%		7	%			796,152			746,751		7	%		6	%
	Retail Media (2)			47,813			33,929		41	%		41	%			124,643			78,295		59	%%		58	%
	Total (1)		$	276,191		$	253,174		9	%		11	%		$	920,795		$	825,046		12	%		11	%

 

 

(1) We define Contribution ex-TAC as our gross profit plus other cost of sales generated over the applicable measurement period. Contribution ex-TAC is not a measure calculated in accordance with U.S. GAAP. We have included Contribution ex-TAC because it is a key measure used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that this measure can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Contribution ex-TAC provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Contribution ex-TAC has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; (b) other companies may report Contribution ex-TAC or similarly titled measures but calculate them differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Contribution ex-TAC alongside our other U.S. GAAP financial result measures. The above table provides a reconciliation of Contribution ex-TAC to gross profit.

(2) Criteo operates as two reportable segments as of December 31, 2021. The table above presents the operating results of our Marketing Solutions and Retail Media segments.  A strategic building block of Criteo's Commerce Media Platform, the Retail Media Platform, introduced in June 2020, and reported under the retail media segment, is a self-service solution providing transparency, measurement and control to brands and retailers. In all arrangements running on this platform, Criteo recognizes revenue on a net basis, whereas revenue from arrangements running on legacy Retail Media solutions are accounted for on a gross basis. We expect most clients using Criteo's legacy Retail Media solutions to transition to this platform by the second half of 2022. As new clients onboard and existing clients transition to the Retail Media Platform, Revenue may decline but Contribution ex-TAC margin will increase. Contribution ex-TAC will not be impacted by this transition.

 

 

CRITEO S.A.
Reconciliation of Adjusted EBITDA to Net Income
(U.S. dollars in thousands, unaudited)
		Three Months Ended									Twelve Months Ended
		December 31,									December 31,
		2021			2020			YoY Change			2021			2020			YoY Change
Net income		$	74,938		$	46,818		60	%		$	137,647		$	74,689		84	%
Adjustments:
Financial (Income) expense			(347)			111		NM				1,044			1,939		(46)	%
Provision for income taxes			(5,864)			20,254		NM				16,169			32,197		(50)	%
Equity awards compensation expense			12,114			8,960		35	%			44,955			31,425		43	%
Research and development			4,762			2,482		92	%			16,334			10,253		59	%
Sales and operations			3,143			3,662		(14)	%			13,023			12,042		8	%
General and administrative			4,209			2,816		49	%			15,598			9,130		71	%
Pension service costs			319			583		(45)	%			1,324			2,232		(41)	%
Research and development			166			290		(43)	%			686			1,114		(38)	%
Sales and operations			49			103		(52)	%			207			394		(47)	%
General and administrative			104			190		(45)	%			431			724		(40)	%
Depreciation and amortization expense			21,756			22,140		(2)	%			88,402			88,238		0.2	%
Cost of revenue (data center equipment)			14,611			15,354		(5)	%			61,119			55,935		9	%
Research and development			2,967			1,712		73	%			9,484			10,741		(12)	%
Sales and operations			3,579			4,033		(11)	%			14,780			16,770		(12)	%
General and administrative			599			1,041		(42)	%			3,019			4,792		(37)	%
Acquisition-related costs			6,118			174		NM				11,256			286		NM
General and administrative			6,118			174		NM				11,256			286		NM
Restructuring related and transformation (gain) costs (1)			1,833			4,383		(58)	%			21,698			19,989		9	%
Research and development			513			747		(31)	%			5,751			4,240		36	%
Sales and operations			568			2,605		(78)	%			9,380			9,398		(0.2)	%
General and administrative			752			1,031		(27)	%			6,567			6,351		3	%
Total net adjustments			35,929			56,605		(37)	%			184,848			176,306		5	%
Adjusted EBITDA (2)		$	110,867		$	103,423		7	%		$	322,495		$	250,995		28	%

 

(1) For the Three Months and the Twelve Months Ended December 2021, and December 2020, respectively, the Company recognized restructuring related and transformation costs following its new organizational structure implemented to support its Commerce Media Platform strategy:

 

	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
	2021		2020		2021		2020
(Gain) from forfeitures of share-based compensation awards	239		(2,655)		(427)		(2,655)
Facilities related (gain) costs	1,328		4,158		16,020		12,975
Payroll related (gain) costs	(157)		1,422		4,480		5,911
Consulting costs related to transformation	423		1,458		1,625		3,758
Total restructuring related and transformation (gain) costs	$                          1,833		$                          4,383		$                        21,698		$                        19,989

 

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

 

(2) We define Adjusted EBITDA as our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity awards compensation expense, pension service costs, acquisition-related costs and restructuring related and transformation costs. Adjusted EBITDA is not a measure calculated in accordance with U.S. GAAP. We have included Adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short-term and long-term operational plans. In particular, we believe that the elimination of equity awards compensation expense, pension service costs, and restructuring related and transformation costs in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; (b) Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (c) Adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation; (d) Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and (e) other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Adjusted EBITDA alongside our U.S. GAAP financial results, including net income.

 

 

CRITEO S.A.
Reconciliation from Non-GAAP Operating Expenses to Operating Expenses under GAAP
(U.S. dollars in thousands, unaudited)
		Three Months Ended									Twelve Months Ended
		December 31,									December 31,
		2021			2020			YoY Change			2021			2020			YoY Change
Research and Development expenses		$	(44,860)		$	(32,797)		37	%		$	(151,817)		$	(132,513)		15	%
Equity awards compensation expense			4,762			2,482		92	%			16,334			10,253		59	%
Depreciation and Amortization expense			2,967			1,712		73	%			9,484			10,741		(12)	%
Pension service costs			166			290		(43)	%			686			1,114		(38)	%
Restructuring related and transformation (gain) costs			513			747		(31)	%			5,751			4,240		36	%
Non GAAP - Research and Development expenses			(36,452)			(27,566)		32	%			(119,562)			(106,165)		13	%
Sales and Operations expenses			(89,892)			(85,871)		5	%			(325,616)			(330,285)		(1)	%
Equity awards compensation expense			3,143			3,662		(14)	%			13,023			12,042		8	%
Depreciation and Amortization expense			3,579			4,033		(11)	%			14,780			16,770		(12)	%
Pension service costs			49			103		(52)	%			207			394		(47)	%
Restructuring related and transformation (gain) costs			568			2,605		(78)	%			9,380			9,398		(0.2)	%
Non GAAP - Sales and Operations expenses			(82,553)			(75,468)		9	%			(288,226)			(291,681)		(1)	%
General and Administrative expenses			(43,855)			(32,623)		34	%			(152,634)			(116,395)		31	%
Equity awards compensation expense			4,209			2,816		49	%			15,598			9,130		71	%
Depreciation and Amortization expense			599			1,041		(42)	%			3,019			4,792		(37)	%
Pension service costs			104			190		(45)	%			431			724		(40)	%
Acquisition-related costs			6,118			174		NM				11,256			286		NM
Restructuring related and transformation (gain) costs			752			1,031		(27)	%			6,567			6,351		3	%
Non GAAP - General and Administrative expenses			(32,073)			(27,371)		17	%			(115,763)			(95,112)		22	%
Total Operating expenses			(178,607)			(151,291)		18.1	%			(630,067)			(579,193)		9	%
Equity awards compensation expense			12,114			8,960		35	%			44,955			31,425		43	%
Depreciation and Amortization expense			7,145			6,786		5	%			27,283			32,303		(16)	%
Pension service costs			319			583		(45)	%			1,324			2,232		(41)	%
Acquisition-related costs			6,118			174		NM				11,256			286		NM
Restructuring related and transformation (gain) costs			1,833			4,383		(58)	%			21,698			19,989		9	%
Total Non GAAP Operating expenses (1)		$	(151,078)		$	(130,405)		16	%		$	(523,551)		$	(492,958)		6	%

 

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

 

 

CRITEO S.A.
Detailed Information on Selected Items
(U.S. dollars in thousands, unaudited)
		Three Months Ended									Twelve Months Ended
		December 31,									December 31,
		2021			2020			YoY Change			2021			2020			YoY Change
Equity awards compensation expense
Research and development		$	4,762		$	2,482		92	%		$	16,334		$	10,253		59	%
Sales and operations			3,143			3,662		(14)	%			13,023			12,042		8	%
General and administrative			4,209			2,816		49	%			15,598			9,130		71	%
Total equity awards compensation expense			12,114			8,960		35	%			44,955			31,425		43	%
Pension service costs
Research and development			166			290		(43)	%			686			1,114		(38)	%
Sales and operations			49			103		(52)	%			207			394		(47)	%
General and administrative			104			190		(45)	%			431			724		(40)	%
Total pension service costs			319			583		(45)	%			1,324			2,232		(41)	%
Depreciation and amortization expense
Cost of revenue (data center equipment)			14,611			15,354		(5)	%			61,119			55,935		9	%
Research and development			2,967			1,712		73	%			9,484			10,741		(12)	%
Sales and operations			3,579			4,033		(11)	%			14,780			16,770		(12)	%
General and administrative			599			1,041		(42)	%			3,019			4,792		(37)	%
Total depreciation and amortization expense			21,756			22,140		(2)	%			88,402			88,238		0.2	%
Acquisition-related costs
General and administrative			6,118			174		NM				11,256			286		NM
Total acquisition-related costs			6,118			174		NM				11,256			286		NM
Restructuring related and transformation (gain) costs
Research and development			513			747		(31)	%			5,751			4,240		36	%
Sales and operations			568			2,605		(78)	%			9,380			9,398		(0.2)	%
General and administrative			752			1,031		(27)	%			6,567			6,351		3	%
Total restructuring related and transformation (gain) costs		$	1,833		$	4,383		(58)	%		$	21,698		$	19,989		9	%

 

 

CRITEO S.A.
Reconciliation of Adjusted Net Income to Net Income
(U.S. dollars in thousands except share and per share data, unaudited)
		Three Months Ended									Twelve Months Ended
		December 31,									December 31,
		2021			2020			YoY Change			2021			2020			YoY Change
Net income		$	74,938		$	46,818		60	%		$	137,647		$	74,689		84	%
Adjustments:
Equity awards compensation expense			12,114			8,960		35	%			44,955			31,425		43	%
Amortization of acquisition-related intangible assets			3,755			2,926		28	%			12,929			15,520		(17)	%
Acquisition-related costs			6,118			174		NM				11,256			286		NM
Restructuring related and transformation (gain) costs			1,833			4,383		(58)	%			21,698			19,989		9	%
Tax impact of the above adjustments (1)			(6,557)			(2,127)		NM				(11,243)			(7,738)		45	%
Total net adjustments			17,263			14,316		21	%			79,595			59,482		34	%
Adjusted net income (2)		$	92,201		$	61,134		51	%		$	217,242		$	134,171		62	%
Weighted average shares outstanding
- Basic			60,590,826			60,336,486						60,717,446			60,876,480
- Diluted			63,985,850			62,348,489						64,231,637			61,818,593
Adjusted net income per share
- Basic		$	1.52		$	1.01		50	%		$	3.58		$	2.20		63	%
- Diluted		$	1.44		$	0.98		47	%		$	3.38		$	2.17		56	%

 

(1) We consider the nature of the adjustment to determine its tax treatment in the various tax jurisdictions we operate in. The tax impact is calculated by applying the actual tax rate for the entity and period to which the adjustment relates.

(2) We define Adjusted Net Income as our net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related intangible assets, acquisition-related costs, restructuring related and transformation costs, and the tax impact of the foregoing adjustments. Adjusted Net Income is not a measure calculated in accordance with U.S. GAAP. We have included Adjusted Net Income because it is a key measure used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the elimination of equity awards compensation expense, amortization of acquisition-related intangible assets, restructuring related and transformation costs and the tax impact of the foregoing adjustments in calculating Adjusted Net Income can provide a useful measure for period-to-period comparisons of our business. Accordingly, we believe that Adjusted Net Income provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Adjusted Net Income has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) Adjusted Net Income does not reflect the potentially dilutive impact of equity-based compensation or the impact of certain acquisition-related costs; and (b) other companies, including companies in our industry, may calculate Adjusted Net Income or similarly titled measures differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Adjusted Net Income alongside our other U.S. GAAP-based financial results, including net income.

 

 

CRITEO S.A.
Constant Currency Reconciliation
(U.S. dollars in thousands, unaudited)
		Three Months Ended											Twelve Months Ended
		December 31,											December 31,
		2021				2020				YoY Change			2021				2020				YoY Change
Revenue as reported		$	653,267			$	661,282			(1)	%		$	2,254,235			$	2,072,617			9	%
Conversion impact U.S. dollar/other currencies			14,553				—							(19,713)				—
Revenue at constant currency(1)			667,820				661,282			1	%			2,234,522				2,072,61			8	%
Traffic acquisition costs as reported			(377,076)				(408,108)			(8)	%			(1,333,440)				(1,247,571)			7	%
Conversion impact U.S. dollar/other currencies			(8,567)				—							12,263				—
Traffic Acquisition Costs at constant currency(1)			(385,643)				(408,108)			(6)	%			(1,321,177)				(1,247,571)			6	%
Contribution ex-TAC as reported(2)			276,191				253,174			9	%			920,795				825,046			12
Conversion impact U.S. dollar/other currencies			5,986				—							(7,450)				—
Contribution ex-TAC at constant currency(2)			282,177				253,174			11	%			913,345				825,046			11	%
Contribution ex-TAC(2)/Revenue as reported			42	%			38	%						41	%			40	%
Other cost of revenue as reported			(31,840)				(34,700)			(8)	%			(138,851)				(137,028)			1	%
Conversion impact U.S. dollar/other currencies			(919)				—							(372)				—
Other cost of revenue at constant currency(1)			(32,759)				(34,700)			(6)	%			(139,223)				(137,028)			2	%
Gross Profit as reported			244,351				218,474			12	%			781,944				688,018			14	%
Conversion impact U.S. dollar/other currencies			5,067				—							(7,822)				—
Gross Profit at constant currency(1)			249,418				218,474			14	%			774,122				688,018			13	%
Adjusted EBITDA(3)			110,867				103,423			7	%			322,495				250,995			28	%
Conversion impact U.S. dollar/other currencies			2,423				—							(7,281)				—
Adjusted EBITDA(3) at constant currency(1)		$	113,290			$	103,423			10	%		$	315,214			$	250,995			26	%
Adjusted EBITDA(3)/Contribution ex-TAC(2)			40	%			41	%						35	%			30	%

 

(1) Information herein with respect to results presented on a constant currency basis is computed by applying prior period average exchange rates to current period results. We have included results on a constant currency basis because it is a key measure used by our management and board of directors to evaluate operating performance. Management reviews and analyzes business results excluding the effect of foreign currency translation because they believe this better represents our underlying business trends. The table above reconciles the actual results presented in this section with the results presented on a constant currency basis.

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

(3) Adjusted EBITDA is not a measure calculated in accordance with U.S. GAAP. See the table entitled "Reconciliation of Adjusted EBITDA to Net Income" for a reconciliation of Adjusted EBITDA to net income.

 

 

 

CRITEO S.A.
Information on Share Count
(unaudited)
		Twelve Months Ended
		2021		2020
Shares outstanding as at January 1,		60,639,570		62,293,508
Weighted average number of shares issued during the period		77,876		(1,417,028)
Basic number of shares - Basic EPS basis		60,717,446		60,876,480
Dilutive effect of share options, warrants, employee warrants - Treasury method		3,514,191		942,113
Diluted number of shares - Diluted EPS basis		64,231,637		61,818,593
Shares issued as December 31, before Treasury stocks		65,883,347		66,272,106
Treasury stock as of December 31,		(5,207,873)		(5,632,536)
Shares outstanding as of December 31, after Treasury stocks		60,675,474		60,639,570
Total dilutive effect of share options, warrants, employee warrants		6,213,932		7,400,024
Fully diluted shares as at December 31,		66,889,406		68,039,594

 

 

 

CRITEO S.A.
Supplemental Financial Information and Operating Metrics
(U.S. dollars in thousands except where stated, unaudited)
	YoY Change	QoQ Change	Q4 2021	Q3 2021	Q2 2021	Q1 2021	Q4 2020	Q3 2020	Q2 2020	Q1 2020	Q4 2019
Clients	1%	—%	21,745	21,747	21,332	20,626	21,460	20,565	20,359	20,360	20,247
Revenue	(1)%	28%	653,267	508,580	551,311	541,077	661,282	470,345	437,614	503,376	652,640
Americas	(8)%	41%	287,270	204,428	221,227	203,900	312,817	204,618	185,674	191,745	306,250
EMEA	1%	25%	234,559	188,354	209,303	212,096	232,137	167,800	159,621	190,114	216,639
APAC	13%	14%	131,438	115,798	120,781	125,081	116,328	97,927	92,319	121,517	129,751
Revenue	(1)%	28%	653,267	508,580	551,311	541,077	661,282	470,345	437,614	503,376	652,640
Marketing Solutions	6%	26%	577,962	458,622	487,465	483,190	543,262	412,126	381,270	469,773	574,783
Retail Media (2)	(36)%	51%	75,305	49,958	63,846	57,887	118,020	58,219	56,344	33,603	77,857
TAC	(8)%	27%	(377,076)	(297,619)	(331,078)	(327,667)	(408,108)	(284,401)	(257,698)	(297,364)	(386,388)
Marketing Solutions	8%	26%	(349,584)	(276,498)	(294,132)	(290,873)	(324,017)	(243,616)	(218,990)	(273,057)	(331,709)
Retail Media (2)	(67)%	30%	(27,492)	(21,121)	(36,946)	(36,794)	(84,091)	(40,785)	(38,708)	(24,307)	(54,679)
Contribution ex-TAC (1)	9%	31%	276,191	210,961	220,233	213,410	253,174	185,944	179,916	206,012	266,252
Marketing Solutions	4%	25%	228,378	182,124	193,333	192,317	219,245	168,510	162,280	196,716	243,074
Retail Media (2)	41%	66%	47,813	28,837	26,900	21,093	33,929	17,434	17,636	9,296	23,178
Cash flow from operating activities	50%	29%	66,012	51,179	26,360	77,362	44,080	51,156	33,377	56,743	59,359
Capital expenditures	(55)%	(36)%	10,145	15,957	13,128	13,780	22,302	12,898	18,532	11,737	17,520
Capital expenditures/Revenue	(1)ppt	(1)ppt	2%	3%	2%	3%	3%	3%	4%	2%	3%
Net cash position	6%	4%	515,527	497,458	489,521	520,060	488,011	626,744	578,181	436,506	418,763
Headcount	7%	5%	2,781	2,658	2,572	2,532	2,594	2,636	2,685	2,701	2,755
Days Sales Outstanding (days - end of month)	9 days	(5) days	65	70	66	64	56	62	61	62	52

 

(1)  We define Contribution ex-TAC as our gross profit plus other costs of revenue generated over the applicable measurement period. Contribution ex-TAC is not a measure calculated in accordance with U.S. GAAP. We have included Contribution ex-TAC because it is a key measure used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that this measure can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Contribution ex-TAC provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Contribution ex-TAC has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; (b) other companies may report Contribution ex-TAC or similarly titled measures but calculate them differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Contribution ex-TAC alongside our other U.S. GAAP financial result measures.

(2) Criteo operates as two reportable segments as of December 31, 2021. The table above presents the operating results of our Marketing Solutions and Retail Media segments.  A strategic building block of Criteo's Commerce Media Platform, the Retail Media Platform, introduced in June 2020, and reported under the retail media segment, is a self-service solution providing transparency, measurement and control to brands and retailers. In all arrangements running on this platform, Criteo recognizes revenue on a net basis, whereas revenue from arrangements running on legacy Retail Media solutions are accounted for on a gross basis. We expect most clients using Criteo's legacy Retail Media solutions to transition to this platform by the second half of 2022. As new clients onboard and existing clients transition to the Retail Media Platform, Revenue may decline but Contribution ex-TAC margin will increase. Contribution ex-TAC will not be impacted by this transition.

 

 

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SOURCE Criteo S.A.

FAQ

What were Criteo's Q4 2021 financial results?

Criteo reported Q4 2021 revenue of $653 million, a 1% decrease YoY, with a gross profit of $244 million.

How did Criteo perform in FY 2021?

Criteo achieved revenue of $2.254 billion for FY 2021, representing a 9% increase compared to FY 2020.

What is Criteo's net income for Q4 2021?

Criteo's net income for Q4 2021 was $75 million, marking a 60% increase YoY.

What strategic acquisition did Criteo announce?

Criteo announced the acquisition of IPONWEB for $380 million to enhance its Commerce Media Platform.

What growth metrics did Criteo achieve in 2021?

Criteo reported a gross profit increase of 14% and a contribution ex-TAC growth of 12% in FY 2021.