CRITEO REPORTS STRONG SECOND QUARTER 2023 RESULTS
Q2 Activated Media Spend Up
Launched First-ever Supply-side Platform Built for Commerce
Second Quarter 2023 Financial Highlights:
The following table summarizes our consolidated financial results for the three months and six months ended June 30, 2023:
Three Months Ended | Six Months Ended | |||||||||
June 30, | June 30, | |||||||||
2023 | 2022 | YoY Change | 2023 | 2022 | YoY Change | |||||
(in millions, except EPS data) | ||||||||||
GAAP Results | ||||||||||
Revenue | (5) % | (9) % | ||||||||
Gross Profit | 8 % | 3 % | ||||||||
Net Income (loss) | 94 % | (20) % | ||||||||
Gross Profit margin | 43 % | 37 % | 6ppt | 42 % | 37 % | 5ppt | ||||
Diluted EPS | (91) % | 18 % | ||||||||
Cash from operating activities | (90) % | (51) % | ||||||||
Cash and cash equivalents | (60) % | (60) % | ||||||||
Non-GAAP Results1 | ||||||||||
Contribution ex-TAC | 12 % | 7 % | ||||||||
Contribution ex-TAC margin | 51 % | 43 % | 8ppt | 50 % | 43 % | 7ppt | ||||
Adjusted EBITDA | 12 % | (16) % | ||||||||
Adjusted diluted EPS | 32 % | 6 % | ||||||||
Free Cash Flow (FCF) | NM | NM | ||||||||
FCF / Adjusted EBITDA | (79) % | (3) % | (76)ppt | (37) % | 60 % | (97)ppt |
"We delivered a strong performance in the second quarter, demonstrating our relentless focus on execution. Our transformation to a Commerce Media powerhouse continues to progress with the successful launch of our Commerce Grid SSP," said Megan Clarken, Chief Executive Officer of Criteo. "We have built a highly scalable Commerce Media platform to drive long-term sustainable growth and shareholder value."
Operating Highlights
- We launched Commerce Grid, a first-of-its-kind supply-side platform (SSP) purpose-built for agencies and publishers looking to efficiently connect media and commerce with programmatic.
- We announced our partnership with Integral Ad Science to bring viewability and invalid traffic (IVT) measurement advancements on any onsite ad format across our network of retailer partners.
- Criteo's activated media spend2, including Iponweb, was
in the last 12 months and$3.8 billion in Q2, growing$0.9 billion 53% year-over-year at constant currency3. - Retail Media Contribution ex-TAC grew
20% year-over-year at constant currency3 and same-retailer Contribution ex-TAC4 retention for Retail Media was118% . - We expanded our platform adoption to 2,400 brands and 210 retailers, including Canadian Tire's Sport Chek and Mark's, and marketplaces like Debenhams and Sprinter.
- Marketing Solutions Contribution ex-TAC was down
5% year-over-year at constant currency3. - One year after the acquisition of Iponweb, we have successfully completed the integration to accelerate our Commerce Media Platform strategy.
- We deployed
of capital for share repurchases in the first half of 2023.$75 million - Rik van der Kooi was appointed to the board of directors at the 2023 Annual Meeting of Shareholders.
___________________________________________________
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 |
2 | Activated media spend is defined as the sum of our Marketing Solutions revenue, the media spend activated on behalf of our Retail Media clients, and the media spend activated by Iponweb. |
3 | Constant currency measures exclude the impact of foreign currency fluctuations and is computed by applying the prior year monthly exchange rates to transactions denominated in settlement or billing currencies other than the US dollar. |
4 | Same-client profitability or Contribution ex-TAC is the profitability or Contribution ex-TAC generated by clients that were live with us in a given quarter and are still live with us the same quarter in the following year. |
Financial Summary
Revenue for Q2 2023 was
Sarah Glickman, Chief Financial Officer, said, "Our second quarter demonstrates the performance of our platform, the resilience of our business model, and our focus on execution. We have momentum heading into the second half of the year, and we remain confident in our 2023 growth outlook."
Second Quarter 2023 Results
Revenue, Gross Profit and Contribution ex-TAC
Revenue decreased by
- Marketing Solutions revenue decreased
10% , or decreased9% at constant currency, and Marketing Solutions Contribution ex-TAC decreased6% , or decreased5% at constant currency, driven by anticipated signal loss impacts and ongoing softness in Retail, partially offset by strength in Travel. - Retail Media revenue decreased
18% , or18% at constant currency, reflecting the impact related to the client migration to the Company's platform. Retail Media Contribution ex-TAC increased19% , or20% at constant currency, driven by continued strength in Retail Media onsite, new client integrations and growing network effects of the platform. - Iponweb revenue reflects three months of contribution following the closing of the acquisition on August 1, 2022.
Net Income (Loss) and Adjusted Net Income
Net loss was
Adjusted net income, a non-GAAP financial measure, was
Adjusted EBITDA and Operating Expenses
Adjusted EBITDA was
Operating expenses decreased
Cash Flow, Cash and Financial Liquidity Position
Cash flow from operating activities decreased to
Free Cash Flow, defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment, decreased to
Cash and cash equivalents, and marketable securities, decreased
As of June 30, 2023, the Company had total financial liquidity of approximately
2023 Business Outlook
The following forward-looking statements reflect Criteo's expectations as of August 2, 2023, amidst an uncertain macro-economic backdrop.
Fiscal year 2023 guidance:
- High single-digit to low double-digit growth in Contribution ex-TAC at constant currency, including the contribution from our Iponweb acquisition
- Adjusted EBITDA margin of approximately
28% of Contribution ex-TAC
Third quarter 2023 guidance:
- Contribution ex-TAC between
and$238 million , or year-over-year growth at constant-currency of +$242 million 7% to +9% , including the contribution from our Iponweb acquisition - Adjusted EBITDA between
and$58 million $62 million
The above guidance for the third quarter and fiscal year ending December 31, 2023 assumes the following exchange rates for the main currencies impacting our business: a
The above guidance assumes that no additional acquisitions are completed during the third quarter of 2023 or the fiscal year ended December 31, 2023.
Reconciliations of Contribution ex-TAC, Adjusted EBITDA and Adjusted EBITDA margin guidance to the closest corresponding
Non-GAAP Financial Measures
This press release and its attachments include the following financial measures defined as non-GAAP financial measures by the
Contribution ex-TAC is a profitability measure akin to gross profit. It is calculated by deducting traffic acquisition costs from revenue and reconciled to gross profit through the exclusion of other costs of revenue. Contribution ex-TAC is not a measure calculated in accordance with
Adjusted EBITDA is our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity awards compensation expense, pension service costs, certain restructuring, integration and transformation costs, certain acquisition costs and a loss contingency related to a regulatory matter. Adjusted EBITDA and Adjusted EBITDA margin are key measures used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, we believe that Adjusted EBITDA and Adjusted EBITDA margin can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.
Adjusted Net Income is our net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related assets, certain restructuring, integration and transformation costs, certain acquisition costs, a loss contingency related to a regulatory matter, and the tax impact of these adjustments. Adjusted Net Income and Adjusted diluted EPS are key measures used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that Adjusted Net Income and Adjusted diluted EPS can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted Net Income and Adjusted diluted EPS provide useful information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.
Free Cash Flow is defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment. Free Cash Flow Conversion is defined as free cash flow divided by Adjusted EBITDA. Free Cash Flow and Free Cash Flow Conversion are key measures used by our management and board of directors to evaluate the Company's ability to generate cash. Accordingly, we believe that Free Cash Flow and Free Cash Flow Conversion permit a more complete and comprehensive analysis of our available cash flows.
Non-GAAP Operating Expenses are our consolidated operating expenses adjusted to eliminate equity awards compensation expense, pension service costs, certain restructuring, integration and transformation costs, certain acquisition and integration costs, and a loss contingency related to a regulatory matter. The Company uses Non-GAAP Operating Expenses to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short-term and long-term operational plans, and to assess and measure our financial performance and the ability of our operations to generate cash. We believe Non-GAAP Operating Expenses reflects our ongoing operating expenses in a manner that allows for meaningful period-to-period comparisons and analysis of trends in our business. As a result, we believe that Non-GAAP Operating Expenses provides useful information to investors in understanding and evaluating our core operating performance and trends in the same manner as our management and in comparing financial results across periods. In addition, Non-GAAP Operating Expenses is a key component in calculating Adjusted EBITDA, which is one of the key measures the Company uses to provide its quarterly and annual business outlook to the investment community.
Please refer to the supplemental financial tables provided in the appendix of this press release for a reconciliation of Contribution ex-TAC to gross profit, Adjusted EBITDA to net income, Adjusted Net Income to net income, Free Cash Flow to cash flow from operating activities, and Non-GAAP Operating Expenses to operating expenses, in each case, the most comparable
Forward-Looking Statements Disclosure
This press release contains forward-looking statements, including projected financial results for the quarter ending September 30, 2023 and the year ending December 31, 2023, our expectations regarding our market opportunity and future growth prospects and other statements that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to: failure related to our technology and our ability to innovate and respond to changes in technology, uncertainty regarding our ability to access a consistent supply of internet display advertising inventory and expand access to such inventory, including without limitation uncertainty regarding the timing and scope of proposed changes to and enhancements of the Chrome browser announced by Google, investments in new business opportunities and the timing of these investments, whether the projected benefits of acquisitions materialize as expected, including the successful integration of our acquisitions of Iponweb and Brandcrush, 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 24, 2023, and in subsequent Quarterly Reports on Form 10-Q as well as future filings and reports by the Company. Importantly, at this time, macro-economic conditions including inflation and rising interest rates in the
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 2, 2023, at 8:00 AM ET, 2:00 PM CET. The conference call will be webcast live on the Company's website at https://criteo.investorroom.com/ and will subsequently be available for replay.
United States : +1 855 209 8212- International: +1 412 317 0788
France 080-510-2319
Please ask to be joined into the "Criteo" call.
About Criteo
Criteo (NASDAQ: CRTO) is the global commerce media company that enables marketers and media owners to drive better commerce outcomes. Its industry leading Commerce Media Platform connects thousands of marketers and media owners to deliver richer consumer experiences from product discovery to purchase. By powering trusted and impactful advertising, Criteo supports an open internet that encourages discovery, innovation, and choice. For more information, please visit www.criteo.com.
Contacts
Criteo Investor Relations
Melanie Dambre, m.dambre@criteo.com
Criteo Public Relations
Jessica Meyers, j.meyers@criteo.com
Financial information to follow
CRITEO S.A. Consolidated Statement of Financial Position ( | ||||
June 30, 2023 | December 31, 2022 | |||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ 223,183 | $ 348,200 | ||
Trade receivables, net of allowances of June 30, 2023 and December 31, 2022, respectively | 573,463 | 708,949 | ||
Income taxes | 28,473 | 23,609 | ||
Other taxes | 92,063 | 78,274 | ||
Other current assets | 45,268 | 51,866 | ||
Restricted cash - current | 75,000 | 25,000 | ||
Marketable securities - current portion | 21,151 | 25,098 | ||
Total current assets | 1,058,601 | 1,260,996 | ||
Property, plant and equipment, net | 143,724 | 131,207 | ||
Intangible assets, net | 179,185 | 175,983 | ||
Goodwill | 522,536 | 515,140 | ||
Right of Use Asset - operating lease | 100,971 | 102,176 | ||
Restricted cash - non current | — | 75,000 | ||
Marketable securities - non current portion | 16,299 | — | ||
Non-current financial assets | 5,311 | 5,928 | ||
Other non-current assets | 49,719 | 50,818 | ||
Deferred tax assets | 52,021 | 31,646 | ||
Total non-current assets | 1,069,766 | 1,087,898 | ||
Total assets | $ 2,128,367 | $ 2,348,894 | ||
Liabilities and shareholders' equity | ||||
Current liabilities: | ||||
Trade payables | $ 616,590 | $ 742,918 | ||
Contingencies - current portion | 45,403 | 65,759 | ||
Income taxes | 3,743 | 13,037 | ||
Financial liabilities - current portion | 614 | 219 | ||
Lease liability - operating - current portion | 32,180 | 31,003 | ||
Other taxes | 60,574 | 58,031 | ||
Employee - related payables | 100,465 | 85,569 | ||
Other current liabilities | 89,447 | 83,457 | ||
Total current liabilities | 949,016 | 1,079,993 | ||
Deferred tax liabilities | 3,537 | 3,463 | ||
Defined benefit plans | 4,358 | 3,708 | ||
Financial liabilities - non current portion | 75 | 74 | ||
Lease liability - operating - non current portion | 74,722 | 77,536 | ||
Contingencies - non current portion | 32,625 | 33,788 | ||
Other non-current liabilities | 21,022 | 69,226 | ||
Total non-current liabilities | 136,339 | 187,795 | ||
Total liabilities | 1,085,355 | 1,267,788 | ||
Commitments and contingencies | ||||
Shareholders' equity: | ||||
Common shares, authorized, issued and outstanding at June 30, 2023 and December 31, 2022 , respectively. | 2,081 | 2,079 | ||
Treasury stock, 7,412,578 and 5,985,104 shares at cost as of June 30, 2023 and December 31, 2022 , respectively. | (214,046) | (174,293) | ||
Additional paid-in capital | 787,674 | 734,492 | ||
Accumulated other comprehensive income (loss) | (91,328) | (91,890) | ||
Retained earnings | 527,857 | 577,653 | ||
Equity - attributable to shareholders of Criteo S.A. | 1,012,238 | 1,048,041 | ||
Non-controlling interests | 30,774 | 33,065 | ||
Total equity | 1,043,012 | 1,081,106 | ||
Total equity and liabilities | $ 2,128,367 | $ 2,348,894 |
CRITEO S.A. | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2023 | 2022 | YoY change | 2023 | 2022 | YoY change | |||||||
Revenue | $ 468,934 | $ 495,090 | (5) % | $ 913,950 | (9) % | |||||||
Cost of revenue | ||||||||||||
Traffic acquisition cost | (228,717) | (280,565) | (18) % | (453,115) | (574,215) | (21) % | ||||||
Other cost of revenue | (40,435) | (29,550) | 37 % | (79,544) | (62,443) | 27 % | ||||||
Gross profit | 199,782 | 184,975 | 8 % | 381,291 | 368,999 | 3 % | ||||||
Operating expenses: | ||||||||||||
Research and development expenses | (67,775) | (41,496) | 63 % | (131,365) | (75,523) | 74 % | ||||||
Sales and operations expenses | (112,511) | (99,313) | 13 % | (213,753) | (188,312) | 14 % | ||||||
General and administrative expenses | (18,537) | (100,672) | (82) % | (58,707) | (134,008) | (56) % | ||||||
Total Operating expenses | (198,823) | (241,481) | (18) % | (403,825) | (397,843) | 2 % | ||||||
Income (loss) from operations | 959 | (56,506) | (102) % | (22,534) | (28,844) | (22) % | ||||||
Financial and Other income (expense) | (1,852) | 16,412 | (111) % | 4,975 | 20,442 | (76) % | ||||||
Loss before taxes | (893) | (40,094) | (98) % | (17,559) | (8,402) | 109 % | ||||||
Provision for income tax (expense) benefit | (1,078) | 7,121 | (115) % | 3,517 | (3,293) | (207) % | ||||||
Net loss | $ (1,971) | $ (32,973) | 94 % | $ (14,042) | $ (11,695) | (20) % | ||||||
Net loss available to shareholders of Criteo S.A. | $ (2,876) | $ (33,614) | 91 % | $ (14,685) | $ (13,027) | (13) % | ||||||
Net income (loss) available to non-controlling interests | $ 905 | $ 641 | 41 % | $ 643 | $ 1,332 | (52) % | ||||||
Weighted average shares outstanding used in computing per share amounts: | ||||||||||||
Basic | 55,924,824 | 60,240,344 | (7) % | 56,094,887 | 60,488,429 | (7) % | ||||||
Diluted | 55,924,824 | 60,240,344 | (7) % | 56,094,887 | 60,488,429 | (7) % | ||||||
Net loss allocated to shareholders per share: | ||||||||||||
Basic | $ (0.05) | $ (0.56) | (91) % | $ (0.26) | $ (0.22) | 18 % | ||||||
Diluted | $ (0.05) | $ (0.56) | (91) % | $ (0.26) | $ (0.22) | 18 % |
CRITEO S.A. Consolidated Statement of Cash Flows ( | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2023 | 2022 | YoY Change | 2023 | 2022 | YoY Change | |||||||
Net loss | $ (1,971) | $ (32,973) | 94 % | $ (14,042) | $ (11,695) | (20) % | ||||||
Non-cash and non-operating items | 16,939 | 63,501 | (73) % | 48,886 | 98,227 | (50) % | ||||||
- Amortization and provisions | 10,111 | 87,891 | (88) % | 37,422 | 114,502 | (67) % | ||||||
- Equity awards compensation expense (1) | 27,173 | 12,021 | 126 % | 52,341 | 21,510 | NM | ||||||
- Net (gain) or loss on disposal of non-current assets | (7) | (705) | (99) % | (8,797) | (696) | NM | ||||||
- Change in deferred taxes | (8,239) | (9,982) | (17) % | (20,536) | (7,114) | NM | ||||||
- Change in income taxes | (13,478) | (14,246) | (5) % | (13,615) | (14,678) | (7) % | ||||||
- Other | 1,379 | (11,478) | (112) % | 2,071 | (15,297) | NM | ||||||
Changes in working capital related to operating activities | (13,640) | (16,556) | (18) % | 8,448 | 2,370 | NM | ||||||
- (Increase) / Decrease in trade receivables | (34,666) | (27,262) | 27 % | 129,454 | 65,476 | 98 % | ||||||
- Increase / (Decrease) in trade payables | 16,454 | 32,695 | (50) % | (128,557) | (16,977) | NM | ||||||
- (Increase) / Decrease in other current assets | 6,942 | 4,352 | 60 % | (6,652) | (14,595) | (54) % | ||||||
- Increase / (Decrease) in other current liabilities | (2,069) | (28,131) | (93) % | 14,597 | (31,313) | NM | ||||||
- Change in operating lease liabilities and right of use assets | (301) | 1,790 | (117) % | (394) | (221) | 78 % | ||||||
CASH FROM (USED FOR) OPERATING ACTIVITIES | 1,328 | 13,972 | (90) % | 43,292 | 88,902 | (51) % | ||||||
Acquisition of intangible assets, property, plant and equipment | (24,312) | (21,937) | 11 % | (61,507) | (32,794) | 88 % | ||||||
Change in accounts payable related to intangible assets, property, plant and equipment | (21,207) | 6,485 | (427) % | (17,231) | 11,778 | NM | ||||||
Payment for business, net of cash acquired | (457) | — | NM | (6,957) | — | NM | ||||||
Proceeds from disposition of investment | — | — | NM | 9,625 | — | NM | ||||||
Change in other non-current financial assets | (6,259) | 21,822 | (129) % | (12,267) | 44,311 | NM | ||||||
CASH FROM (USED FOR) INVESTING ACTIVITIES | (52,235) | 6,370 | (920) % | (88,337) | 23,295 | NM | ||||||
Proceeds from borrowings under line-of-credit agreement | — | — | NM | — | 78,513 | NM | ||||||
Repayment of borrowings | — | — | NM | — | (78,513) | NM | ||||||
Change in other financial liabilities | — | 7,808 | (100) % | — | — | NM | ||||||
Proceeds from exercise of stock options | 431 | 80 | 439 % | 1,697 | 351 | NM | ||||||
Repurchase of treasury stocks | (23,836) | (21,030) | 13 % | (74,866) | (29,334) | NM | ||||||
Cash payment for contingent consideration | — | — | NM | (22,025) | — | NM | ||||||
Other | (495) | — | NM | (923) | 14,474 | NM | ||||||
CASH FROM (USED FOR) FINANCING ACTIVITIES | (23,900) | (13,142) | 82 % | (96,117) | (14,509) | NM | ||||||
Effect of exchange rates changes on cash and cash equivalents | (7,673) | (33,996) | (77) % | (8,855) | (50,669) | (83) % | ||||||
Net increase (decrease) in cash and cash equivalents | (82,480) | (26,796) | 208 % | (150,017) | 47,019 | NM | ||||||
Net cash and cash equivalents at beginning of period | 380,663 | 589,342 | (35) % | 448,200 | 515,527 | (13) % | ||||||
Net cash and cash equivalents and restricted cash at end of period | $ 298,183 | $ 562,546 | (47) % | $ 298,183 | $ 562,546 | (47) % | ||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||||||||
Cash paid for taxes, net of refunds | $ (23,201) | $ (17,107) | 36 % | $ (31,101) | $ (25,085) | 24 % | ||||||
Cash paid for interest | $ (60) | $ (261) | (77) % | $ (676) | $ (626) | 8 % |
(1) | Share-based compensation expense according to ASC 718 Compensation - stock compensation accounted for |
CRITEO S.A. Reconciliation of Cash from Operating Activities to Free Cash Flow ( | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2023 | 2022 | YoY Change | 2023 | 2022 | YoY Change | |||||||
CASH FROM (USED FOR) OPERATING ACTIVITIES | $ 1,328 | $ 13,972 | (90) % | $ 43,292 | $ 88,902 | (51) % | ||||||
Acquisition of intangible assets, property, plant and equipment | (24,312) | (21,937) | 11 % | (61,507) | (32,794) | 88 % | ||||||
Change in accounts payable related to intangible assets, property, plant and equipment | (21,207) | 6,485 | (427) % | (17,231) | 11,778 | NM | ||||||
FREE CASH FLOW (1) | $ (44,191) | $ (1,480) | NM | $ (35,446) | $ 67,886 | NM |
(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 ( | |||||||||||
Three Months Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
2023 | 2022 | YoY Change | 2023 | 2022 | YoY Change | ||||||
Gross Profit | 199,782 | 184,975 | 8 % | 381,291 | 368,999 | 3 % | |||||
Other Cost of Revenue | 40,435 | 29,550 | 37 % | 79,544 | 62,443 | 27 % | |||||
Contribution ex-TAC (1) | $ 240,217 | $ 214,525 | 12 % | $ 460,835 | $ 431,442 | 7 % |
(1) | Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric. |
CRITEO S.A. Segment Information ( | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
Segment | 2023 | 2022 | YoY Change | YoY Change at Constant Currency (3) | 2023 | 2022 | YoY Change | YoY Change at Constant Currency (3) | |||||||||
Revenue | |||||||||||||||||
Marketing Solutions | $ 395,274 | $ 440,423 | (10) % | (9) % | $ 777,181 | $ 904,311 | (14) % | (12) % | |||||||||
Retail Media (2) | 44,590 | 54,667 | (18) % | (18) % | 82,611 | 101,346 | (18) % | (18) % | |||||||||
Iponweb | 29,070 | — | NM | NM | 54,158 | — | NM | NM | |||||||||
Total | 468,934 | 495,090 | (5) % | (4) % | 913,950 | 1,005,657 | (9) % | (7) % | |||||||||
Contribution ex-TAC | |||||||||||||||||
Marketing Solutions | 167,629 | 177,969 | (6) % | (5) % | 325,807 | 364,057 | (11) % | (7) % | |||||||||
Retail Media (2) | 43,518 | 36,556 | 19 % | 20 % | 80,870 | 67,385 | 20 % | 21 % | |||||||||
Iponweb | 29,070 | — | NM | NM | 54,158 | — | NM | NM | |||||||||
Total (1) | $ 240,217 | $ 214,525 | 12 % | 13 % | $ 460,835 | $ 431,442 | 7 % | 10 % |
(1) | Refer to the Non-GAAP Financial Measures section of this filing for a definition of the Non-GAAP metric. |
(2) | The Retail Media Platform, introduced in June 2020, is a strategic building block of Criteo's Commerce Media Platform and is reported under the retail media segment. It 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 were accounted for on a gross basis. Most clients using Criteo's legacy Retail Media solutions transitioned to this platform by the end of 2022. During the transition period, Revenue declined but Contribution ex-TAC margin increased. Contribution ex-TAC was not impacted by this transition. |
(3) | Constant currency measures exclude the impact of foreign currency fluctuations and is computed by applying the prior year monthly exchange rates to transactions denominated in settlement or billing currencies other than the US dollar. |
CRITEO S.A. Reconciliation of Adjusted EBITDA to Net Income (Loss) ( | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2023 | 2022 | YoY Change | 2023 | 2022 | YoY Change | |||||||
Net loss | $ (1,971) | $ (32,973) | (94) % | $ (14,042) | $ (11,695) | 20 % | ||||||
Adjustments: | ||||||||||||
Financial (Income) expense | 1,956 | (15,924) | (112) % | (4,650) | (19,954) | (77) % | ||||||
Provision for income taxes | 1,078 | (7,121) | (115) % | (3,517) | 3,293 | (207) % | ||||||
Equity awards compensation expense | 27,831 | 12,020 | 132 % | 53,896 | 21,510 | 151 % | ||||||
Pension service costs | 177 | 264 | (33) % | 353 | 539 | (35) % | ||||||
Depreciation and amortization expense | 26,606 | 20,141 | 32 % | 51,926 | 42,285 | 23 % | ||||||
Acquisition-related costs | 362 | 1,977 | (82) % | 1,194 | 4,521 | (74) % | ||||||
Net loss contingency on regulatory matters | (21,616) | 65,684 | (133) % | (21,616) | 65,684 | (133) % | ||||||
Restructuring, integration and transformation costs | 21,563 | 5,925 | 264 % | 31,165 | 6,635 | 370 % | ||||||
Total net adjustments | 57,957 | 82,966 | (30) % | 108,751 | 124,513 | (13) % | ||||||
Adjusted EBITDA (1) | $ 55,986 | $ 49,993 | 12 % | $ 94,709 | $ 112,818 | (16) % |
(1) | Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric. |
CRITEO S.A. Reconciliation from Non-GAAP Operating Expenses to Operating Expenses under GAAP ( | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2023 | 2022 | YoY Change | 2023 | 2022 | YoYhange | |||||||
Research and Development expenses | $ (67,775) | $ (41,496) | 63 % | $ (131,365) | $ (75,523) | 74 % | ||||||
Equity awards compensation expense | 16,339 | 5,578 | 193 % | 32,675 | 9,545 | 242 % | ||||||
Depreciation and Amortization expense | 8,518 | 3,181 | 168 % | 18,844 | 6,474 | 191 % | ||||||
Pension service costs | 94 | 136 | (31) % | 186 | 278 | (33) % | ||||||
Acquisition-related costs | 99 | — | NM | 503 | — | NM | ||||||
Restructuring, integration and transformation costs | 4,467 | 1,029 | 334 % | 5,341 | 1,038 | 415 % | ||||||
Non GAAP - Research and Development expenses | (38,258) | (31,572) | 21 % | (73,816) | (58,188) | 27 % | ||||||
Sales and Operations expenses | (112,511) | (99,313) | 13 % | (213,753) | (188,312) | 14 % | ||||||
Equity awards compensation expense | 5,687 | 2,550 | 123 % | 10,427 | 5,118 | 104 % | ||||||
Depreciation and Amortization expense | 4,059 | 3,729 | 9 % | 6,875 | 7,338 | (6) % | ||||||
Pension service costs | 27 | 39 | (31) % | 55 | 79 | (30) % | ||||||
Acquisition-related costs | — | 178 | (100) % | — | 178 | (100) % | ||||||
Restructuring, integration and transformation costs | 12,667 | 4,076 | 211 % | 17,401 | 4,532 | 284 % | ||||||
Non GAAP - Sales and Operations expenses | (90,071) | (88,741) | 1 % | (178,995) | (171,067) | 5 % | ||||||
General and Administrative expenses | (18,537) | (100,672) | (82) % | (58,707) | (134,008) | (56) % | ||||||
Equity awards compensation expense | 5,805 | 3,892 | 49 % | 10,794 | 6,847 | 58 % | ||||||
Depreciation and Amortization expense | 566 | 606 | (7) % | 1,086 | 1,216 | (11) % | ||||||
Pension service costs | 56 | 89 | (37) % | 112 | 182 | (38) % | ||||||
Acquisition-related costs | 263 | 1,799 | (85) % | 691 | 4,343 | (84) % | ||||||
Restructuring, integration and transformation costs | 4,429 | 820 | 440 % | 8,423 | 1,065 | 691 % | ||||||
Net loss contingency on regulatory matters | (21,616) | 65,684 | (133) % | (21,616) | 65,684 | (133) % | ||||||
Non GAAP - General and Administrative expenses | (29,034) | (27,782) | 5 % | (59,217) | (54,671) | 8 % | ||||||
Total Operating expenses | (198,823) | (241,481) | (18) % | (403,825) | (397,843) | 2 % | ||||||
Equity awards compensation expense | 27,831 | 12,020 | 132 % | 53,896 | 21,510 | 151 % | ||||||
Depreciation and Amortization expense | 13,143 | 7,516 | 75 % | 26,805 | 15,028 | 78 % | ||||||
Pension service costs | 177 | 264 | (33) % | 353 | 539 | (35) % | ||||||
Acquisition-related costs | 362 | 1,977 | (82) % | 1,194 | 4,521 | (74) % | ||||||
Restructuring, integration and transformation costs | 21,563 | 5,925 | 264 % | 31,165 | 6,635 | 370 % | ||||||
Net loss contingency on regulatory matters | (21,616) | 65,684 | (133) % | (21,616) | 65,684 | (133) % | ||||||
Total Non GAAP Operating expenses (1) | (157,363) | $ (148,095) | 6 % | (312,028) | (283,926) | 10 % |
(1) | Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric. |
CRITEO S.A. Reconciliation of Adjusted Net Income to Net Income (Loss) ( | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2023 | 2022 | YoY Change | 2023 | 2022 | YoY Change | |||||||
Net loss | $ (1,971) | $ (32,973) | (94) % | $ (14,042) | $ (11,695) | 20 % | ||||||
Adjustments: | ||||||||||||
Equity awards compensation expense | 27,831 | 12,020 | 132 % | 53,896 | 21,510 | 151 % | ||||||
Amortization of acquisition-related intangible assets | 8,812 | 3,614 | 144 % | 17,345 | 7,322 | 137 % | ||||||
Acquisition-related costs | 362 | 1,977 | (82) % | 1,194 | 4,521 | (74) % | ||||||
Net loss contingency on regulatory matters | (21,616) | 65,684 | (133) % | (21,616) | 65,684 | (133) % | ||||||
Restructuring, integration and transformation costs | 21,563 | 5,925 | 264 % | 31,165 | 6,635 | 370 % | ||||||
Tax impact of the above adjustments (1) | (5,333) | (33,220) | (84) % | (10,282) | (37,176) | (72) % | ||||||
Total net adjustments | 31,619 | 56,000 | (44) % | 71,702 | 68,496 | 5 % | ||||||
Adjusted net income(2) | $ 29,648 | $ 23,027 | 29 % | $ 57,660 | $ 56,801 | 2 % | ||||||
Weighted average shares outstanding | ||||||||||||
- Basic | 55,924,824 | 60,240,344 | 56,094,887 | 60,488,429 | ||||||||
- Diluted | 60,474,688 | 62,303,670 | 60,489,192 | 62,957,718 | ||||||||
Adjusted net income per share | ||||||||||||
- Basic | $ 0.53 | $ 0.38 | 39 % | $ 1.03 | $ 0.94 | 10 % | ||||||
- Diluted | $ 0.49 | $ 0.37 | 32 % | $ 0.95 | $ 0.90 | 6 % |
(1) | We consider the nature of the adjustment to determine its tax treatment in the various tax jurisdictions we operate in. The tax impact is calculated by applying the actual tax rate for the entity and period to which the adjustment relates. |
(2) | Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric. |
CRITEO S.A. Constant Currency Reconciliation ( | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2023 | 2022 | YoY Change | 2023 | 2022 | YoY Change | |||||||
Gross Profit as reported | $ 199,782 | $ 184,975 | 8 % | $ 381,291 | $ 368,999 | 3 % | ||||||
Other cost of revenue as reported | (40,435) | (29,550) | 37 % | (79,544) | (62,443) | 27 % | ||||||
Contribution ex-TAC as reported(1) | 240,217 | 214,525 | 12 % | 460,835 | 431,442 | 7 % | ||||||
Conversion impact | 2,205 | 12,144 | ||||||||||
Contribution ex-TAC at constant currency(2) | 242,422 | 214,525 | 13 % | 472,979 | 431,442 | 10 % | ||||||
Contribution ex-TAC(2)/Revenue as reported | 51 % | 43 % | 50 % | 43 % | ||||||||
Traffic acquisition costs as reported | (228,717) | (280,565) | (18) % | (453,115) | (574,215) | (21) % | ||||||
Conversion impact | (2,140) | (10,658) | ||||||||||
Traffic acquisition costs at constant currency | (230,857) | (280,565) | (18) % | (463,773) | (574,215) | (19) % | ||||||
Revenue as reported | 468,934 | 495,090 | (5) % | 913,950 | 1,005,657 | (9) % | ||||||
Conversion impact | 4,345 | 22,802 | ||||||||||
Revenue at constant currency | $ 473,279 | $ 495,090 | (4) % | $ 936,752 | (7) % |
(1) | Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric. |
(2) | 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. |
CRITEO S.A. Information on Share Count (unaudited) | ||||
Six Months Ended | ||||
2023 | 2022 | |||
Shares outstanding as at January 1, | 57,263,624 | 60,675,474 | ||
Weighted average number of shares issued during the period | (1,168,737) | (187,045) | ||
Basic number of shares - Basic EPS basis | 56,094,887 | 60,488,429 | ||
Dilutive effect of share options, warrants, employee warrants - Treasury method | — | — | ||
Diluted number of shares - Diluted EPS basis | 56,094,887 | 60,488,429 | ||
Shares issued as at June 30, before Treasury stocks | 63,337,453 | 65,794,032 | ||
Treasury stocks as of June 30, | (7,412,578) | (5,265,393) | ||
Fully diluted shares as at June 30, | 55,924,875 | 60,528,639 | ||
Total dilutive effect of share options, warrants, employee warrants | 9,340,335 | 6,874,991 | ||
Fully diluted shares as at June 30, | 65,265,210 | 67,403,630 |
CRITEO S.A. Supplemental Financial Information and Operating Metrics ( | ||||||||||||
YoY Change | QoQ Change | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | Q1 2022 | Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 | |
Clients | (1.6) % | (0.4) % | 18,646 | 18,679 | 18,990 | 19,008 | 18,911 | 18,764 | NA | NA | NA | NA |
Revenue | (5) % | 5 % | 468,934 | 445,016 | 564,425 | 446,921 | 495,090 | 510,567 | 653,267 | 508,580 | 551,311 | 541,077 |
(4) % | 9 % | 204,755 | 188,288 | 281,806 | 201,274 | 213,340 | 194,847 | 287,270 | 204,428 | 221,227 | 203,900 | |
EMEA | (11) % | (1) % | 158,215 | 160,214 | 185,125 | 150,915 | 176,867 | 193,954 | 234,559 | 188,354 | 209,303 | 212,096 |
APAC | 1 % | 10 % | 105,964 | 96,514 | 97,494 | 94,732 | 104,883 | 121,766 | 131,438 | 115,798 | 120,781 | 125,081 |
Revenue | (5) % | 5 % | 468,934 | 445,016 | 564,425 | 446,921 | 495,090 | 510,567 | 653,267 | 508,580 | 551,311 | 541,077 |
Marketing Solutions | (10) % | 4 % | 395,274 | 381,907 | 470,918 | 387,288 | 440,423 | 463,888 | 577,962 | 458,622 | 487,465 | 483,190 |
Retail Media (2) | (18) % | 17 % | 44,590 | 38,021 | 59,801 | 41,170 | 54,667 | 46,679 | 75,305 | 49,958 | 63,846 | 57,887 |
Iponweb | NM | 16 % | 29,070 | 25,088 | 33,706 | 18,463 | — | — | — | — | — | — |
TAC | (18) % | 2 % | (228,717) | (224,398) | (281,021) | (233,543) | (280,565) | (293,650) | (377,076) | (297,619) | (331,078) | (327,667) |
Marketing Solutions | (13) % | 2 % | (227,645) | (223,729) | (278,302) | (229,266) | (262,454) | (277,800) | (349,584) | (276,498) | (294,132) | (290,873) |
Retail Media (2) | (94) % | 60 % | (1,072) | (669) | (2,719) | (4,277) | (18,111) | (15,850) | (27,492) | (21,121) | (36,946) | (36,794) |
Iponweb | NM | NM | — | — | — | — | — | — | — | — | — | — |
Contribution ex-TAC (1) | 12 % | 9 % | 240,217 | 220,618 | 283,404 | 213,378 | 214,525 | 216,917 | 276,191 | 210,961 | 220,233 | 213,410 |
Marketing Solutions | (6) % | 6 % | 167,629 | 158,178 | 192,616 | 158,022 | 177,969 | 186,088 | 228,378 | 182,124 | 193,333 | 192,317 |
Retail Media (2) | 19 % | 17 % | 43,518 | 37,352 | 57,082 | 36,893 | 36,556 | 30,829 | 47,813 | 28,837 | 26,900 | 21,093 |
Iponweb | NM | 16 % | 29,070 | 25,088 | 33,706 | 18,463 | — | — | — | — | — | — |
Cash flow from operating activities | (90) % | (97) % | 1,328 | 41,964 | 125,455 | 41,628 | 13,972 | 74,930 | 66,012 | 51,179 | 26,360 | 77,362 |
Capital expenditures | 195 % | 37 % | 45,519 | 33,219 | 14,522 | 20,307 | 15,452 | 5,564 | 10,145 | 15,957 | 13,128 | 13,780 |
Capital expenditures/Revenue | 211 % | 30 % | 10 % | 7 % | 3 % | 5 % | 3 % | 1 % | 2 % | 3 % | 2 % | 3 % |
Net cash position | (47) % | (22) % | 298,183 | 380,663 | 448,200 | 407,323 | 562,546 | 589,343 | 515,527 | 497,458 | 489,521 | 520,060 |
Headcount | 12 % | (3) % | 3,514 | 3,636 | 3,716 | 3,537 | 3,146 | 2,939 | 2,781 | 2,658 | 2,572 | 2,532 |
Days Sales Outstanding (days - end of month) | (7) days | (5) days | 69 | 74 | 71 | 78 | 76 | 74 | 65 | 70 | 66 | 64 |
(1) | Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric. |
(2) | The Retail Media Platform, introduced in June 2020, is a strategic building block of Criteo's Commerce Media Platform and is reported under the retail media segment. It 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 were accounted for on a gross basis. Most clients using Criteo's legacy Retail Media solutions transitioned to this platform by the end of 2022. During the transition period, Revenue declined but Contribution ex-TAC margin increased. Contribution ex-TAC was not impacted by this transition. |
View original content:https://www.prnewswire.com/news-releases/criteo-reports-strong-second-quarter-2023-results-301890741.html
SOURCE Criteo S.A.