Expects to Return a Record $180 Million of Capital to Shareholders in 2024
Hosting Retail Media Investor Update on November 18, 2024
NEW YORK, Oct. 30, 2024 /PRNewswire/ -- Criteo S.A. (NASDAQ: CRTO) ("Criteo" or the "Company"), the commerce media company, today announced financial results for the third quarter ended September 30, 2024.
Third Quarter 2024 Financial Highlights:
The following table summarizes our consolidated financial results for the three months and nine months ended September 30, 2024:
Three Months Ended | Nine Months Ended | |||||||||
September 30, | September 30, | |||||||||
2024 | 2023 | YoY | 2024 | 2023 | YoY | |||||
(in millions, except EPS data) | ||||||||||
GAAP Results | ||||||||||
Revenue | $459 | $469 | (2) % | $1,380 | $1,383 | - % | ||||
Gross Profit | $232 | $205 | 13 % | $682 | $586 | 16 % | ||||
Net Income (loss) | $6 | $7 | (7) % | $43 | $(7) | 677 % | ||||
Gross Profit margin | 51 % | 44 % | 7ppt | 49 % | 42 % | 7 ppt | ||||
Diluted EPS | $0.11 | $0.12 | (8) % | $0.69 | $(0.14) | 593 % | ||||
Cash from operating activities | $58 | $20 | 193 % | $89 | $63 | 41 % | ||||
Cash and cash equivalents | $209 | $195 | 7 % | $209 | $195 | 7 % | ||||
Non-GAAP Results 1 | ||||||||||
Contribution ex-TAC | $266 | $245 | 8 % | $787 | $706 | 11 % | ||||
Adjusted EBITDA | $82 | $68 | 20 % | $246 | $163 | 51 % | ||||
Adjusted diluted EPS | $0.96 | $0.71 | 35 % | $2.84 | $1.66 | 71 % | ||||
Free Cash Flow (FCF) | $39 | $4 | 925 % | $35 | $(32) | 212 % | ||||
FCF / Adjusted EBITDA | 47 % | 6 % | 41ppt | 14 % | (19) % | 33 ppt | ||||
"We are pleased to report another strong quarter with robust growth and solid progress across our strategic initiatives," said Megan Clarken, Chief Executive Officer of Criteo. "Our momentum is a testament to our team's hard work and the trust our clients place in us. We remain focused on executing our plan to create the world's leading Commerce Media Platform and drive shareholder value."
Operating Highlights
- Retail Media Contribution ex-TAC grew 23% year-over-year at constant currency2 and same-retailer Contribution ex-TAC3 retention for Retail Media was 120%.
- We expanded our platform adoption to 3,100 brands and 225 retailers and marketplaces, including JCPenney, Office Depot & ODP Business Solutions, Metro AG, Flaschenpost and Rohlik.
- Kinective Media by United Airlines chose Criteo to help power and scale its offsite monetization.
- Performance Media4 Contribution ex-TAC was up 5% year-over-year at constant currency.
- Criteo's activated media spend5 was $4.3 billion in the last 12 months and $1.1 billion in Q3 2024, down (2)% year-over-year at constant currency2.
- We deployed $157 million of capital for share repurchases in the first nine months of 2024, and we expect to return $180 million of capital to shareholders in 2024.
- Criteo was named a Leader in IDC MarketScape's 2024 worldwide retail media network service providers vendor assessment.
1 Contribution ex-TAC, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted diluted EPS and Free Cash Flow are not measures calculated in accordance with U.S. GAAP. | |||||
2 Constant currency measures exclude the impact of foreign currency fluctuations and is computed by applying the prior year monthly exchange rates to transactions denominated in settlement or billing currencies other than the US dollar. | |||||
3 Same-retailer Contribution ex-TAC retention is the Contribution ex-TAC generated by clients that were live with us in a given quarter and are still live with us the same quarter in the following year. | |||||
4 Beginning with the first quarter of 2024, Criteo changed its segment reporting structure to two reportable segments: Retail Media and Performance Media. See the Form 8-K filed with the SEC on March 4, 2024 for more details. | |||||
5 Activated media spend is defined as the media spend activated on behalf of our Retail Media clients and our Performance Media clients. | |||||
Financial Summary
Revenue for Q3 2024 was $459 million, gross profit was $232 million and Contribution ex-TAC was $266 million. Net income for Q3 was $6 million, or $0.11 per share on a diluted basis. Adjusted EBITDA for Q3 was $82 million, resulting in an adjusted diluted EPS of $0.96. As reported, revenue for Q3 decreased by (2)%, gross profit increased 13% and Contribution ex-TAC increased by 8%. At constant currency, revenue for Q3 decreased by (2)% and Contribution ex-TAC increased by 9%. Cash flow from operating activities was $58 million in Q3 and Free Cash Flow was $39 million in Q3. As of September 30, 2024, we had $237 million in cash and marketable securities on our balance sheet.
Sarah Glickman, Chief Financial Officer, said, "We delivered strong operating leverage enabled by top-line growth and disciplined cost management in Q3. We enter the holiday season with confidence to deliver double-digit growth and margin expansion for the year while continuing to invest in our transformation."
Third Quarter 2024 Results
Revenue, Gross Profit and Contribution ex-TAC
Revenue decreased by (2)% year-over-year in Q3 2024, or (2)% at constant currency, to $459 million (Q3 2023: $469 million). Gross profit increased by 13% year-over-year in Q3 2024 to $232 million (Q3 2023: $205 million). Gross profit as a percentage of revenue, or gross profit margin, was 51% (Q3 2023: 44%). Contribution ex-TAC in the third quarter increased 8% year-over-year, or increased 9% at constant currency, to $266 million (Q3 2023: $245 million).
- Retail Media revenue increased 22%, or 22% at constant currency, reflecting continued strength in Retail Media onsite. Retail Media Contribution ex-TAC increased 23%, or 23% at constant currency, driven by continued strength in Retail Media onsite, new client integrations and growing network effects of the platform.
- Performance Media revenue decreased (5)%, or (5)% at constant currency, and Performance Media Contribution ex-TAC increased 5%, or 5% at constant currency, driven by the continued traction of Commerce Audiences as more clients adopt full funnel activation and resilient Retargeting, partially offset by lower AdTech services and supply.
Net Income (Loss) and Adjusted Net Income
Net income was $6 million in Q3 2024 (Q3 2023: net income of $7 million). Net income allocated to shareholders of Criteo was $6 million, or $0.11 per share on a diluted basis (Q3 2023: net income available to shareholders of $7 million, or $0.12 per share on a diluted basis).
Adjusted net income, a non-GAAP financial measure, was $56 million, or $0.96 per share on a diluted basis (Q3 2023: $43 million, or $0.71 per share on a diluted basis).
Adjusted EBITDA and Operating Expenses
Adjusted EBITDA was $82 million, representing an increase of 20% year-over-year (Q3 2023: $68 million). This primarily reflects higher Contribution ex-TAC over the period and effective cost management. Adjusted EBITDA as a percentage of Contribution ex-TAC, or Adjusted EBITDA margin, was 31% (Q3 2023: 28%).
Operating expenses increased by 15% year-over-year to $222 million (Q3 2023: $194 million), mostly driven by planned growth investments. Non-GAAP operating expenses increased by 7% year-over-year to $158 million (Q3 2023: $148 million).
Cash Flow, Cash and Financial Liquidity Position
Cash flow from operating activities was $58 million in Q3 2024 (Q3 2023: $20 million).
Free Cash Flow, defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment, was $39 million in Q3 2024 (Q3 2023: $4 million). On a trailing 12-month basis, Free Cash Flow was $177 million.
Cash and cash equivalents, and marketable securities, were $237 million, a $(122) million decrease compared to December 31, 2023, after spending $157 million on share repurchases in the nine months ended September 30, 2024.
As of September 30, 2024, the Company had total financial liquidity of approximately $711 million, including its cash position, marketable securities, revolving credit facility and treasury shares reserved for M&A.
2024 Business Outlook
The following forward-looking statements reflect Criteo's expectations as of October 30, 2024.
Fiscal year 2024 guidance:
- We now expect Contribution ex-TAC to grow +10% to 11% at constant currency.
- We now expect an Adjusted EBITDA margin of approximately 32% to 33% of Contribution ex-TAC.
Fourth quarter 2024 guidance:
- We expect Contribution ex-TAC between $327 million and $333 million , or year-over-year growth at constant-currency of +3% to +5%.
- We expect Adjusted EBITDA between $114 million and $120 million .
The guidance for the fourth quarter and fiscal year ending December 31, 2024 assumes the following exchange rates for the main currencies impacting our business: a U.S. dollar-euro rate of 0.915, a U.S. dollar-Japanese Yen rate of 151, a U.S. dollar-British pound rate of 0.778, a U.S. dollar-Korean Won rate of 1,353 and a U.S. dollar-Brazilian real rate of 5.34.
The guidance assumes that no additional acquisitions are completed during the fourth quarter of 2024.
Reconciliations of Contribution ex-TAC, Adjusted EBITDA and Adjusted EBITDA margin guidance to the closest corresponding U.S. GAAP measures are not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures; in particular, the measures and effects of equity awards compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our share price. The variability of the above charges could potentially have a significant impact on our future U.S. GAAP financial results.
Retail Media Investor Update
Criteo will webcast its Retail Media investor presentation on November 18, 2024, starting at 8:30 AM ET, 2:30 PM CET. The event will be an opportunity for the Company to provide an update on its Retail Media business and opportunities ahead. It will be accessible via live webcast or on-demand via our Investor site post-event.
Non-GAAP Financial Measures
This press release and its attachments include the following financial measures defined as non-GAAP financial measures by the U.S. Securities and Exchange Commission ("SEC"): Contribution ex-TAC, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted diluted EPS, Free Cash Flow and Non-GAAP Operating Expenses. These measures are not calculated in accordance with U.S. GAAP.
Contribution ex-TAC is a profitability measure akin to gross profit. It is calculated by deducting traffic acquisition costs from revenue and reconciled to gross profit through the exclusion of other costs of revenue. Contribution ex-TAC is not a measure calculated in accordance with U.S. GAAP. We have included Contribution ex-TAC because it is a key measure used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions. In particular, we believe that this measure can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Contribution ex-TAC provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors.
Adjusted EBITDA is our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity awards compensation expense, pension service costs, certain restructuring, integration and transformation costs, and certain acquisition costs. Adjusted EBITDA and Adjusted EBITDA margin are key measures used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, we believe that Adjusted EBITDA and Adjusted EBITDA margin can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.
Adjusted Net Income is our net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related assets, certain restructuring, integration and transformation costs, certain acquisition costs, and the tax impact of these adjustments. Adjusted Net Income and Adjusted diluted EPS are key measures used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that Adjusted Net Income and Adjusted diluted EPS can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted Net Income and Adjusted diluted EPS provide useful information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.
Free Cash Flow is defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment. Free Cash Flow Conversion is defined as free cash flow divided by Adjusted EBITDA. Free Cash Flow and Free Cash Flow Conversion are key measures used by our management and board of directors to evaluate the Company's ability to generate cash. Accordingly, we believe that Free Cash Flow and Free Cash Flow Conversion permit a more complete and comprehensive analysis of our available cash flows.
Non-GAAP Operating Expenses are our consolidated operating expenses adjusted to eliminate equity awards compensation expense, pension service costs, certain restructuring, integration and transformation costs, and certain acquisition and integration costs. The Company uses Non-GAAP Operating Expenses to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short-term and long-term operational plans, and to assess and measure our financial performance and the ability of our operations to generate cash. We believe Non-GAAP Operating Expenses reflects our ongoing operating expenses in a manner that allows for meaningful period-to-period comparisons and analysis of trends in our business. As a result, we believe that Non-GAAP Operating Expenses provides useful information to investors in understanding and evaluating our core operating performance and trends in the same manner as our management and in comparing financial results across periods. In addition, Non-GAAP Operating Expenses is a key component in calculating Adjusted EBITDA, which is one of the key measures the Company uses to provide its quarterly and annual business outlook to the investment community.
Please refer to the supplemental financial tables provided in the appendix of this press release for a reconciliation of Contribution ex-TAC to gross profit, Adjusted EBITDA to net income, Adjusted Net Income to net income, Free Cash Flow to cash flow from operating activities, and Non-GAAP Operating Expenses to operating expenses, in each case, the most comparable U.S. GAAP measure. Our use of non-GAAP financial measures has limitations as an analytical tool, and you should not consider such non-GAAP measures in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: 1) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; and 2) other companies may report Contribution ex-TAC, Contribution ex-TAC margin, Adjusted EBITDA, Adjusted Net Income, Free Cash Flow, Non-GAAP Operating Expenses or similarly titled measures but calculate them differently or over different regions, which reduces their usefulness as comparative measures. Because of these and other limitations, you should consider these measures alongside our U.S. GAAP financial results, including revenue and net income.
Forward-Looking Statements Disclosure
This press release contains forward-looking statements, including projected financial results for the year ending December 31, 2024, our expectations regarding our market opportunity and future growth prospects and other statements that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to: failure related to our technology and our ability to innovate and respond to changes in technology, uncertainty regarding our ability to access a consistent supply of internet display advertising inventory and expand access to such inventory, including without limitation uncertainty regarding the timing and scope of proposed changes to and enhancements of the Chrome browser announced by Google, investments in new business opportunities and the timing of these investments, whether the projected benefits of acquisitions materialize as expected, uncertainty regarding international growth and expansion (including related to changes in a specific country's or region's political or economic conditions), the impact of competition, uncertainty regarding legislative, regulatory or self-regulatory developments regarding data privacy matters and the impact of efforts by other participants in our industry to comply therewith, the impact of consumer resistance to the collection and sharing of data, our ability to access data through third parties, failure to enhance our brand cost-effectively, recent growth rates not being indicative of future growth, our ability to manage growth, potential fluctuations in operating results, our ability to grow our base of clients, and the financial impact of maximizing Contribution ex-TAC, as well as risks related to future opportunities and plans, including the uncertainty of expected future financial performance and results and those risks detailed from time-to-time under the caption "Risk Factors" and elsewhere in the Company's SEC filings and reports, including the Company's Annual Report on Form 10-K filed with the SEC on February 23, 2024, and in subsequent Quarterly Reports on Form 10-Q as well as future filings and reports by the Company. Importantly, at this time, macro-economic conditions including inflation and fluctuating interest rates in the U.S. have impacted Criteo's business, financial condition, cash flow and results of operations.
Except as required by law, the Company undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events, changes in expectations or otherwise.
Conference Call Information
Criteo's senior management team will discuss the Company's earnings on a call that will take place today, October 30, 2024, at 8:00 AM ET, 1:00 PM CET. The conference call will be webcast live on the Company's website at https://criteo.investorroom.com/ and will subsequently be available for replay.
- United States: +1 800 836 8184
- International: +1 646 357 8785
- France 080-094-5120
Please ask to be joined into the "Criteo" call.
About Criteo
Criteo (NASDAQ: CRTO) is the global commerce media company that enables marketers and media owners to drive better commerce outcomes. Its industry leading Commerce Media Platform connects thousands of marketers and media owners to deliver richer consumer experiences from product discovery to purchase. By powering trusted and impactful advertising, Criteo supports an open internet that encourages discovery, innovation, and choice. For more information, please visit www.criteo.com.
Contacts
Criteo Investor Relations
Melanie Dambre, [email protected]
Criteo Public Relations
Jessica Meyers, [email protected]
Financial information to follow
CRITEO S.A. Consolidated Statement of Financial Position (U.S. dollars in thousands, unaudited) | ||||
September 30, 2024 | December 31, 2023 | |||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ 208,740 | $ 336,341 | ||
Trade receivables, net of allowances of $ 35.1 million and $ 43.3 million at | 646,283 | 775,589 | ||
Income taxes | 9,785 | 2,065 | ||
Other taxes | 132,370 | 109,306 | ||
Other current assets | 44,879 | 48,291 | ||
Restricted cash | 75,250 | 75,000 | ||
Marketable securities - current portion | 23,010 | 5,970 | ||
Total current assets | 1,140,317 | 1,352,562 | ||
Property, plant and equipment, net | 116,866 | 126,494 | ||
Intangible assets, net | 170,359 | 180,888 | ||
Goodwill | 526,569 | 524,197 | ||
Right of Use Asset - operating lease | 110,350 | 112,487 | ||
Marketable securities - non current portion | 5,598 | 16,575 | ||
Non-current financial assets | 4,957 | 5,294 | ||
Other non-current assets | 62,216 | 60,742 | ||
Deferred tax assets | 71,128 | 52,680 | ||
Total non-current assets | 1,068,043 | 1,079,357 | ||
Total assets | $ 2,208,360 | $ 2,431,919 | ||
Liabilities and shareholders' equity | ||||
Current liabilities: | ||||
Trade payables | $ 629,997 | $ 838,522 | ||
Contingencies - current portion | 1,604 | 1,467 | ||
Income taxes | 15,490 | 17,213 | ||
Financial liabilities - current portion | 4,753 | 3,389 | ||
Lease liability - operating - current portion | 26,159 | 35,398 | ||
Other taxes | 83,401 | 66,659 | ||
Employee - related payables | 104,095 | 113,287 | ||
Other current liabilities | 109,118 | 104,552 | ||
Total current liabilities | 974,617 | 1,180,487 | ||
Deferred tax liabilities | 3,182 | 1,083 | ||
Defined benefit plans | 4,938 | 4,123 | ||
Financial liabilities - non current portion | 320 | 77 | ||
Lease liability - operating - non current portion | 87,321 | 83,051 | ||
Contingencies - non current portion | 31,939 | 32,625 | ||
Other non-current liabilities | 20,536 | 19,082 | ||
Total non-current liabilities | 148,236 | 140,041 | ||
Total liabilities | 1,122,853 | 1,320,528 | ||
Commitments and contingencies | ||||
Shareholders' equity: | ||||
Common shares, €0.025 par value, 59,180,216 and 61,165,663 shares | 1,970 | 2,023 | ||
Treasury stock, 4,399,179 and 5,400,572 shares at cost as of September 30, | (152,997) | (161,788) | ||
Additional paid-in capital | 728,707 | 769,240 | ||
Accumulated other comprehensive income (loss) | (83,345) | (85,326) | ||
Retained earnings | 557,072 | 555,456 | ||
Equity - attributable to shareholders of Criteo S.A. | 1,051,407 | 1,079,605 | ||
Non-controlling interests | 34,100 | 31,786 | ||
Total equity | 1,085,507 | 1,111,391 | ||
Total equity and liabilities | $ 2,208,360 | $ 2,431,919 | ||
CRITEO S.A. | ||||||||
Three Months Ended | Nine Months Ended | |||||||
September 30, | September 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
Revenue | $ 458,892 | $ 469,193 | $ 1,380,254 | $ 1,383,143 | ||||
Cost of revenue | ||||||||
Traffic acquisition cost | (192,789) | (223,798) | (593,170) | (676,913) | ||||
Other cost of revenue | (34,171) | (40,268) | (105,084) | (119,812) | ||||
Gross profit | 231,932 | 205,127 | 682,000 | 586,418 | ||||
Operating expenses: | ||||||||
Research and development expenses | (85,285) | (62,522) | (211,782) | (193,887) | ||||
Sales and operations expenses | (90,823) | (94,572) | (278,734) | (308,325) | ||||
General and administrative expenses | (46,222) | (36,599) | (134,590) | (95,306) | ||||
Total Operating expenses | (222,330) | (193,693) | (625,106) | (597,518) | ||||
Income (loss) from operations | 9,602 | 11,434 | 56,894 | (11,100) | ||||
Financial and Other income | (8) | (2,967) | 889 | 2,008 | ||||
Income (loss) before taxes | 9,594 | 8,467 | 57,783 | (9,092) | ||||
Provision for income tax (expense) benefit | (3,450) | (1,832) | (15,014) | 1,685 | ||||
Net income (loss) | $ 6,144 | $ 6,635 | $ 42,769 | $ (7,407) | ||||
Net income (loss) available to shareholders of Criteo S.A. | $ 6,245 | $ 6,927 | $ 40,476 | $ (7,758) | ||||
Net income (loss) available to non-controlling interests | $ (101) | $ (292) | $ 2,293 | $ 351 | ||||
Weighted average shares outstanding used in computing per | ||||||||
Basic | 54,695,112 | 56,297,666 | 54,840,650 | 56,173,218 | ||||
Diluted | 58,430,133 | 60,172,953 | 58,909,952 | 56,173,218 | ||||
Net income (loss) allocated to shareholders per share: | ||||||||
Basic | $ 0.11 | $ 0.12 | $ 0.74 | $ (0.14) | ||||
Diluted | $ 0.11 | $ 0.12 | $ 0.69 | $ (0.14) | ||||
CRITEO S.A. Consolidated Statement of Cash Flows (U.S. dollars in thousands, unaudited) | ||||||||
Three Months Ended | Nine Months Ended | |||||||
September 30, | September 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
Net income (loss) | $ 6,144 | $ 6,635 | $ 42,769 | $ (7,407) | ||||
Non-cash and non-operating items | 53,439 | (6,180) | 136,013 | 42,706 | ||||
- Amortization and provisions | 20,810 | 18,866 | 67,134 | 56,288 | ||||
- Payment for contingent liability on regulatory matters | - | (43,334) | - | (43,334) | ||||
- Equity awards compensation expense | 34,215 | 24,012 | 82,193 | 76,353 | ||||
- Net (gain) or loss on disposal of non-current assets | 350 | (106) | 924 | (8,903) | ||||
- Change in uncertain tax positions | 7 | 153 | 1,764 | (314) | ||||
- Net change in fair value of earn-out | 15 | 983 | 3,202 | 1,499 | ||||
- Change in deferred taxes | (24,459) | (4,206) | (16,370) | (24,742) | ||||
- Change in income taxes | 19,099 | (4,392) | (9,321) | (18,007) | ||||
- Other | 3,402 | 1,844 | 6,487 | 3,866 | ||||
Changes in working capital related to operating activities | (2,080) | 19,159 | (90,075) | 27,607 | ||||
- (Increase) / Decrease in trade receivables | 2,075 | (50,564) | 138,595 | 78,890 | ||||
- Increase / (Decrease) in trade payables | (17,653) | 57,367 | (210,863) | (71,190) | ||||
- (Increase) / Decrease in other current assets | 7,591 | 8,620 | (16,430) | 1,968 | ||||
- Increase / (Decrease) in other current liabilities | 5,924 | 3,329 | 1,452 | 17,926 | ||||
- Change in operating lease liabilities and right of use assets | (17) | 407 | (2,829) | 13 | ||||
CASH FROM OPERATING ACTIVITIES | 57,503 | 19,614 | 88,707 | 62,906 | ||||
Acquisition of intangible assets, property, plant and equipment | (19,396) | (16,331) | (56,364) | (77,838) | ||||
Change in accounts payable related to intangible assets, property, | 497 | 482 | 3,122 | (16,749) | ||||
Payment for business, net of cash acquired | - | - | (527) | (6,957) | ||||
Proceeds from disposition of investment | - | - | - | 9,625 | ||||
Change in other non-current financial assets | (4,910) | (13) | (5,197) | (12,280) | ||||
CASH USED FOR INVESTING ACTIVITIES | (23,809) | (15,862) | (58,966) | (104,199) | ||||
Proceeds from exercise of stock options | 3,226 | 251 | 4,433 | 1,948 | ||||
Repurchase of treasury stocks | (54,997) | (28,488) | (157,492) | (103,354) | ||||
Cash payment for contingent consideration | - | - | - | (22,025) | ||||
Change in other financing activities | (486) | (504) | (1,296) | (1,427) | ||||
CASH USED FOR FINANCING ACTIVITIES | (52,257) | (28,741) | (154,355) | (124,858) | ||||
Effect of exchange rates changes on cash and cash equivalents | 10,855 | (3,337) | (2,737) | (12,192) | ||||
Net decrease in cash and cash equivalents and restricted cash | (7,708) | (28,326) | (127,351) | (178,343) | ||||
Net cash and cash equivalents and restricted cash at beginning of | 291,698 | 298,183 | 411,341 | 448,200 | ||||
Net cash and cash equivalents and restricted cash at end of | $ 283,990 | $ 269,857 | $ 283,990 | $ 269,857 | ||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW | ||||||||
Cash paid for taxes, net of refunds | $ (11,528) | $ (10,276) | $ (36,099) | $ (41,377) | ||||
Cash paid for interest | $ (379) | $ (439) | $ (1,032) | $ (1,055) | ||||
CRITEO S.A. Reconciliation of Cash from Operating Activities to Free Cash Flow (U.S. dollars in thousands, unaudited) | ||||||||
Three Months Ended | Nine Months Ended | |||||||
September 30, | September 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
CASH FROM OPERATING ACTIVITIES | $ 57,503 | $ 19,614 | $ 88,707 | $ 62,906 | ||||
Acquisition of intangible assets, property, plant and equipment | (19,396) | (16,331) | (56,364) | (77,838) | ||||
Change in accounts payable related to intangible assets, property, plant and | 497 | 482 | 3,122 | (16,749) | ||||
FREE CASH FLOW (1) | $ 38,604 | $ 3,765 | $ 35,465 | $ (31,681) | ||||
(1) Free Cash Flow is defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment. |
CRITEO S.A. Reconciliation of Contribution ex-TAC to Gross Profit (U.S. dollars in thousands, unaudited) | |||||||||||
Three Months Ended | Nine Months Ended | ||||||||||
September 30, | September 30, | ||||||||||
2024 | 2023 | YoY Change | 2024 | 2023 | YoY Change | ||||||
Gross Profit | 231,932 | 205,127 | 13 % | 682,000 | 586,418 | 16 % | |||||
Other Cost of Revenue | 34,171 | 40,268 | (15) % | 105,084 | 119,812 | (12) % | |||||
Contribution ex-TAC (1) | $ 266,103 | $ 245,395 | 8 % | $ 787,084 | $ 706,230 | 11 % | |||||
(1) Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric. |
CRITEO S.A. Segment Information (U.S. dollars in thousands, unaudited) | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
Segment | 2024 | 2023 | YoY | YoY | 2024 | 2023 | YoY | YoY | |||||||||
Revenue | |||||||||||||||||
Retail Media | $ 60,765 | $ 49,813 | 22 % | 22 % | $ 166,414 | $ 132,424 | 26 % | 26 % | |||||||||
Performance Media (1) | 398,127 | 419,380 | (5) % | (5) % | 1,213,840 | 1,250,719 | (3) % | (1.5) % | |||||||||
Total | 458,892 | 469,193 | (2) % | (2) % | 1,380,254 | 1,383,143 | - % | 1 % | |||||||||
Contribution ex-TAC | |||||||||||||||||
Retail Media | 59,583 | 48,436 | 23 % | 23 % | 163,618 | 129,306 | 27 % | 26 % | |||||||||
Performance Media | 206,520 | 196,959 | 5 % | 5 % | 623,466 | 576,924 | 8 % | 10 % | |||||||||
Total (2) | $ 266,103 | $ 245,395 | 8 % | 9 % | $ 787,084 | $ 706,230 | 11 % | 13 % | |||||||||
(1) Beginning with the first quarter of 2024, Criteo changed its segment reporting structure to two reportable segments: Retail Media and Performance Media. See the Form 8-K filed with the SEC on March 4, 2024 for more details. |
(2) Refer to the Non-GAAP Financial Measures section of this filing for a definition of the Non-GAAP metric. |
(3) Constant currency measures exclude the impact of foreign currency fluctuations and is computed by applying the prior year monthly exchange rates to transactions denominated in settlement or billing currencies other than the US dollar. |
CRITEO S.A. Reconciliation of Adjusted EBITDA to Net Income (Loss) (U.S. dollars in thousands, unaudited) | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2024 | 2023 | YoY Change | 2024 | 2023 | YoY Change | |||||||
Net income (loss) | $ 6,144 | $ 6,635 | (7) % | $ 42,769 | $ (7,407) | 677 % | ||||||
Adjustments: | ||||||||||||
Financial (Income) expense | 8 | 2,958 | (100) % | (889) | (1,692) | 47 % | ||||||
Provision for income taxes | 3,450 | 1,832 | 88 % | 15,014 | (1,685) | 991 % | ||||||
Equity awards compensation expense | 34,863 | 24,323 | 43 % | 84,032 | 78,219 | 7 % | ||||||
Pension service costs | 174 | 179 | (3) % | 518 | 532 | (3) % | ||||||
Depreciation and amortization expense | 25,684 | 24,648 | 4 % | 75,679 | 76,574 | (1) % | ||||||
Acquisition-related costs | 1,961 | 86 | NM | 1,961 | 1,281 | 53 % | ||||||
Net loss contingency on regulatory matters | - | (51) | 100 % | - | (21,667) | 100 % | ||||||
Restructuring, integration and transformation costs | 9,717 | 7,833 | 24 % | 27,026 | 38,998 | (31) % | ||||||
Total net adjustments | 75,857 | 61,808 | 23 % | 203,341 | 170,560 | 19 % | ||||||
Adjusted EBITDA (1) | $ 82,001 | $ 68,443 | 20 % | $ 246,110 | $ 163,153 | 51 % | ||||||
(1) Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric. |
CRITEO S.A. Reconciliation from Non-GAAP Operating Expenses to Operating Expenses under GAAP (U.S. dollars in thousands, unaudited) | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2024 | 2023 | YoY | 2024 | 2023 | YoY | |||||||
Research and Development expenses | $ (85,285) | $ (62,522) | 36 % | $ (211,782) | $ (193,887) | 9 % | ||||||
Equity awards compensation expense | 21,261 | 11,938 | 78 % | 44,915 | 44,613 | 1 % | ||||||
Depreciation and Amortization expense | 13,593 | 9,383 | 45 % | 38,196 | 28,227 | 35 % | ||||||
Pension service costs | 92 | 95 | (3) % | 273 | 281 | (3) % | ||||||
Acquisition-related costs | - | 4 | (100) % | - | 507 | (100) % | ||||||
Restructuring, integration and transformation costs | 5,455 | 3,482 | 57 % | 8,164 | 8,823 | (7) % | ||||||
Non GAAP - Research and Development expenses | (44,884) | (37,620) | 19 % | (120,234) | (111,436) | 8 % | ||||||
Sales and Operations expenses | (90,823) | (94,572) | (4) % | (278,734) | (308,325) | (10) % | ||||||
Equity awards compensation expense | 5,032 | 6,387 | (21) % | 16,093 | 16,814 | (4) % | ||||||
Depreciation and Amortization expense | 3,279 | 3,252 | 1 % | 9,649 | 10,127 | (5) % | ||||||
Pension service costs | 26 | 28 | (7) % | 78 | 83 | (6) % | ||||||
Restructuring, integration and transformation costs | 855 | (391) | 319 % | 5,493 | 17,010 | (68) % | ||||||
Non GAAP - Sales and Operations expenses | (81,631) | (85,296) | (4) % | (247,421) | (264,291) | (6) % | ||||||
General and Administrative expenses | (46,222) | (36,599) | 26 % | (134,590) | (95,306) | 41 % | ||||||
Equity awards compensation expense | 8,570 | 5,998 | 43 % | 23,024 | 16,792 | 37 % | ||||||
Depreciation and Amortization expense | 437 | 564 | (23) % | 1,325 | 1,650 | (20) % | ||||||
Pension service costs | 56 | 56 | - % | 167 | 168 | (1) % | ||||||
Acquisition-related costs | 1,961 | 82 | NM | 1,961 | 774 | 153 % | ||||||
Restructuring, integration and transformation costs | 3,407 | 4,742 | (28) % | 13,369 | 13,165 | 2 % | ||||||
Net loss contingency on regulatory matters | - | (51) | 100 % | - | (21,667) | 100 % | ||||||
Non GAAP - General and Administrative expenses | (31,791) | (25,208) | 26 % | (94,744) | (84,424) | 12 % | ||||||
Total Operating expenses | (222,330) | (193,693) | 15 % | (625,106) | (597,518) | 5 % | ||||||
Equity awards compensation expense | 34,863 | 24,323 | 43 % | 84,032 | 78,219 | 7 % | ||||||
Depreciation and Amortization expense | 17,309 | 13,199 | 31 % | 49,170 | 40,004 | 23 % | ||||||
Pension service costs | 174 | 179 | (3) % | 518 | 532 | (3) % | ||||||
Acquisition-related costs | 1,961 | 86 | NM | 1,961 | 1,281 | 53 % | ||||||
Restructuring, integration and transformation costs | 9,717 | 7,833 | 24 % | 27,026 | 38,998 | (31) % | ||||||
Net loss contingency on regulatory matters | - | (51) | 100 % | - | (21,667) | 100 % | ||||||
Total Non GAAP Operating expenses (1) | (158,306) | $ (148,124) | 7 % | (462,399) | (460,151) | - % | ||||||
(1) Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric. |
CRITEO S.A. Reconciliation of Adjusted Net Income to Net Income (Loss) (U.S. dollars in thousands except share and per share data, unaudited) | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2024 | 2023 | YoY | 2024 | 2023 | YoY | |||||||
Net income (loss) | $ 6,144 | $ 6,635 | (7) % | $ 42,769 | $ (7,407) | 677 % | ||||||
Adjustments: | ||||||||||||
Equity awards compensation expense | 34,863 | 24,323 | 43 % | 84,032 | 78,219 | 7 % | ||||||
Amortization of acquisition-related intangible assets | 8,995 | 8,692 | 3 % | 26,287 | 26,037 | 1 % | ||||||
Acquisition-related costs | 1,961 | 86 | NM | 1,961 | 1,281 | 53 % | ||||||
Net loss contingency on regulatory matters | - | (51) | 100 % | - | (21,667) | 100 % | ||||||
Restructuring, integration and transformation costs | 9,717 | 7,833 | 24 % | 27,026 | 38,998 | (31) % | ||||||
Tax impact of the above adjustments (1) | (5,862) | (4,785) | (23) % | (15,048) | (15,067) | - % | ||||||
Total net adjustments | 49,674 | 36,098 | 38 % | 124,258 | 107,801 | 15 % | ||||||
Adjusted net income (2) | $ 55,818 | $ 42,733 | 31 % | $ 167,027 | $ 100,394 | 66 % | ||||||
Weighted average shares outstanding | ||||||||||||
- Basic | 54,695,112 | 56,297,666 | 54,840,650 | 56,173,218 | ||||||||
- Diluted | 58,430,133 | 60,172,953 | 58,909,952 | 60,394,517 | ||||||||
Adjusted net income per share | ||||||||||||
- Basic | $ 1.02 | $ 0.76 | 34 % | $ 3.05 | $ 1.79 | 70 % | ||||||
- Diluted | $ 0.96 | $ 0.71 | 35 % | $ 2.84 | $ 1.66 | 71 % | ||||||
(1) We consider the nature of the adjustment to determine its tax treatment in the various tax jurisdictions we operate in. The tax impact is calculated by applying the actual tax rate for the entity and period to which the adjustment relates. |
(2) Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric. |
CRITEO S.A. Constant Currency Reconciliation (1) (U.S. dollars in thousands, unaudited) | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2024 | 2023 | YoY Change | 2024 | 2023 | YoY Change | |||||||
Gross Profit as reported | $ 231,932 | $ 205,127 | 13 % | $ 682,000 | $ 586,418 | 16 % | ||||||
Other cost of revenue as reported | 34,171 | 40,268 | (15) % | 105,084 | 119,812 | (12) % | ||||||
Contribution ex-TAC as reported(2) | 266,103 | 245,395 | 8 % | 787,084 | 706,230 | 11 % | ||||||
Conversion impact U.S. dollar/other currencies | 534 | - | 9,858 | - | ||||||||
Contribution ex-TAC at constant currency | 266,637 | 245,395 | 9 % | 796,942 | 706,230 | 13 % | ||||||
Traffic acquisition costs as reported | 192,789 | 223,798 | (14) % | 593,170 | 676,913 | (12) % | ||||||
Conversion impact U.S. dollar/other currencies | 1,164 | - | 8,253 | - | ||||||||
Traffic acquisition costs at constant currency | 193,953 | 223,798 | (13) % | 601,423 | 676,913 | (11) % | ||||||
Revenue as reported | 458,892 | 469,193 | (2) % | 1,380,254 | 1,383,143 | - % | ||||||
Conversion impact U.S. dollar/other currencies | 1,698 | - | 18,110 | - | ||||||||
Revenue at constant currency | $ 460,590 | $ 469,193 | (2) % | $ 1,398,364 | $ 1,383,143 | 1 % | ||||||
(1) Constant currency measures exclude the impact of foreign currency fluctuations and is computed by applying the prior year monthly exchange rates to transactions denominated in settlement or billing currencies other than the US dollar. |
(2) Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric. |
CRITEO S.A. Information on Share Count (unaudited) | ||||
Nine Months Ended | ||||
2024 | 2023 | |||
Shares outstanding as at January 1, | 55,765,091 | 57,263,624 | ||
Weighted average number of shares issued during the period | (924,441) | (1,090,406) | ||
Basic number of shares - Basic EPS basis | 54,840,650 | 56,173,218 | ||
Dilutive effect of share options, warrants, employee warrants - Treasury method | 4,069,302 | - | ||
Diluted number of shares - Diluted EPS basis | 58,909,952 | 56,173,218 | ||
Shares issued as at September 30, before Treasury stocks | 59,180,216 | 63,350,663 | ||
Treasury stocks as of September 30, | (4,399,179) | (7,094,574) | ||
Shares outstanding as of September 30, after Treasury stocks | 54,781,037 | 56,256,089 | ||
Total dilutive effect of share options, warrants, employee warrants | 7,238,687 | 8,341,387 | ||
Fully diluted shares as at September 30, | 62,019,724 | 64,597,476 | ||
CRITEO S.A. Supplemental Financial Information and Operating Metrics (U.S. dollars in thousands except where stated, unaudited) | |||||||||||
YoY Change | QoQ Change | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | |
Clients | (7) % | (3) % | 17,162 | 17,744 | 17,767 | 18,197 | 18,423 | 18,646 | 18,679 | 18,990 | 19,008 |
Revenue | (2) % | (3) % | 458,892 | 471,307 | 450,055 | 566,302 | 469,193 | 468,934 | 445,016 | 564,425 | 446,921 |
Americas | (6) % | (3) % | 206,816 | 212,374 | 198,365 | 280,597 | 219,667 | 208,463 | 188,288 | 281,806 | 201,274 |
EMEA | 2 % | (4) % | 161,745 | 168,496 | 162,842 | 189,291 | 158,756 | 163,969 | 160,214 | 185,125 | 150,915 |
APAC | - % | - % | 90,331 | 90,437 | 88,848 | 96,414 | 90,770 | 96,502 | 96,514 | 97,494 | 94,732 |
Revenue | (2) % | (3) % | 458,892 | 471,307 | 450,055 | 566,302 | 469,193 | 468,934 | 445,016 | 564,425 | 446,921 |
Retail Media | 22 % | 11 % | 60,765 | 54,777 | 50,872 | 76,583 | 49,813 | 44,590 | 38,021 | 59,801 | 41,170 |
Performance Media | (5) % | (4) % | 398,127 | 416,530 | 399,183 | 489,719 | 419,380 | 424,344 | 406,995 | 504,624 | 405,751 |
TAC | (14) % | (6) % | (192,789) | (204,214) | (196,167) | (249,926) | (223,798) | (228,717) | (224,398) | (281,021) | (233,543) |
Retail Media | (14) % | 30 % | (1,182) | (911) | (703) | (2,429) | (1,377) | (1,072) | (669) | (2,719) | (4,277) |
Performance Media | (14) % | (6) % | (191,607) | (203,303) | (195,464) | (247,497) | (222,421) | (227,645) | (223,729) | (278,302) | (229,266) |
Contribution ex-TAC (1) | 8 % | - % | 266,103 | 267,093 | 253,888 | 316,376 | 245,395 | 240,217 | 220,618 | 283,404 | 213,378 |
Retail Media | 23 % | 11 % | 59,583 | 53,866 | 50,169 | 74,154 | 48,436 | 43,518 | 37,352 | 57,082 | 36,893 |
Performance Media | 5 % | (3) % | 206,520 | 213,227 | 203,719 | 242,222 | 196,959 | 196,699 | 183,266 | 226,322 | 176,485 |
Cash flow from | 193 % | 235 % | 57,503 | 17,187 | 14,017 | 161,340 | 19,614 | 1,328 | 41,964 | 125,455 | 41,628 |
Capital expenditures | 19 % | (11) % | 18,899 | 21,119 | 13,224 | 19,724 | 15,849 | 45,519 | 33,219 | 14,522 | 20,307 |
Net cash position | 5 % | (3) % | 283,990 | 291,698 | 341,862 | 411,257 | 269,857 | 298,183 | 380,663 | 448,200 | 407,323 |
Headcount | - % | - % | 3,504 | 3,498 | 3,559 | 3,563 | 3,487 | 3,514 | 3,636 | 3,716 | 3,537 |
Days Sales Outstanding | 4 days | 1 days | 65 | 64 | 66 | 58 | 61 | 69 | 74 | 71 | 78 |
(1)Refer to the "Non-GAAP Financial Measures" section for a definition of this Non-GAAP metric. |
(2) From September 2023, we have included Iponweb in our calculation of Days Sales Outstanding. Days Sales Outstanding excluding Iponweb would have been 71 days for the same period. |
SOURCE Criteo Corp
