CRITEO REPORTS RECORD FIRST QUARTER 2024 RESULTS

NEW YORK, May 2, 2024

NEW YORK, May 2, 2024 /PRNewswire/ -- Criteo S.A. (NASDAQ: CRTO) ("Criteo" or the "Company"), the commerce media company, today announced financial results for the first quarter ended March 31, 2024.

First Quarter 2024 Financial Highlights:

The following table summarizes our consolidated financial results for the three months ended March 31, 2024:

	Three Months Ended
	March 31, ARIVA.DE Börsen-Geflüster Kurse Criteo SA ADR 36,20 € +0,56%
	2024		2023		YoY Change
	(in millions, except EPS data)
GAAP Results
Revenue	$450		$445		1 %
Gross Profit	$217		$182		20 %
Net Income (loss)	$9		$(12)		171 %
Gross Profit margin	48 %		41 %		7 ppt
Diluted EPS	$0.12		$(0.21)		157 %
Cash from operating activities	$14		$42		(67) %
Cash and cash equivalents	$267		$306		(13) %
Non-GAAP Results1
Contribution ex-TAC	$254		$221		15 %
Adjusted EBITDA	$71		$39		83 %
Adjusted diluted EPS	$0.80		$0.50		60 %
Free Cash Flow (FCF)	$1		$9		(91) %
FCF / Adjusted EBITDA	1 %		23 %		(22) ppt

"We are proud to be the leading AdTech player in Retail Media and the platform of choice for performance-based targeting, which, we believe, will drive sustainable growth and shareholder value," said Megan Clarken, Chief Executive Officer of Criteo. "I am thrilled to report a record start to the year, and I am confident that we will continue to build on this momentum."

Operating Highlights

• Retail Media Contribution ex-TAC grew 34% year-over-year at constant currency² and same-retailer Contribution ex-TAC³ retention for Retail Media was 136%.
• We expanded our platform adoption to 2,700 brands and close to 225 retailers and marketplaces, including Ticketmaster. We also expanded our partnership with Walmart Connect in Guatemala, Costa Rica, Nicaragua, Honduras, and El Salvador.
• We achieved our first accreditation by the Media Rating Council (MRC) for Retail Media measurement.
• Performance Media⁴ Contribution ex-TAC was up 13% year-over-year at constant currency².
• Criteo's activated media spend⁵ was $4.2 billion in the last 12 months and $1.0 billion in Q1 2024, growing 13% year-over-year at constant currency².
• We deployed $62 million of capital for share repurchases in Q1 2024, and we intend to return $150 million of capital to shareholders in 2024.
• We nominated Ernst Teunissen for election to the Board of directors of the Company at the 2024 Annual Meeting of Shareholders.

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Financial Summary

Revenue for Q1 2024 was $450 million, gross profit was $217 million and Contribution ex-TAC was $254 million. Net income for Q1 was $9 million, or $0.12 per share on a diluted basis. Adjusted EBITDA for Q1 was $71 million, resulting in an adjusted diluted EPS of $0.80. As reported, revenue for Q1 increased by 1%, gross profit increased 20% and Contribution ex-TAC increased by 15%. At constant currency, revenue for Q1 increased by 3% and Contribution ex-TAC increased by 17%. Cash flow from operating activities was $14 million in Q1 and Free Cash Flow was $1 million in Q1. As of March 31, 2024, we had $289 million in cash and marketable securities on our balance sheet.

Sarah Glickman, Chief Financial Officer, said, "We are raising our full-year 2024 guidance after delivering a record first quarter performance. We are confident in our business strategy and financial strength, which is reflected in the deployment of $62 million of capital for share repurchases in Q1."

First Quarter 2024 Result

Revenue, Gross Profit and Contribution ex-TAC

Revenue increased by 1% year-over-year in Q1 2024, or 3% at constant currency, to $450 million (Q1 2023: $445 million). Gross profit increased by 20% year-over-year in Q1 2024 to $217 million (Q1 2023: $182 million). Gross profit as a percentage of revenue, or gross profit margin, was 48% (Q1 2023: 41%). Contribution ex-TAC in the first quarter increased 15% year-over-year, or increased 17% at constant currency, to $254 million (Q1 2023: $221 million).

• Retail Media revenue increased 34%, or 33% at constant currency, reflecting continued strength in Retail Media onsite. Retail Media Contribution ex-TAC increased 34%, or 34% at constant currency, driven by continued strength in Retail Media onsite, new client integrations and growing network effects of the platform.
• Performance Media revenue was down 2%, or flat at constant currency, and Performance Media Contribution ex-TAC increased 11%, or increased 13% at constant currency, driven by the continued traction of Commerce Audiences as more clients adopt full funnel activation.

Net Income (Loss) and Adjusted Net Income

Net income was $9 million in Q1 2024 (Q1 2023: net loss of $12 million). Net income allocated to shareholders of Criteo was $7 million, or $0.12 per share on a diluted basis (Q1 2023: net loss available to shareholders of $12 million, or $0.21 per share on a diluted basis).

Adjusted net income, a non-GAAP financial measure, was $47 million, or $0.80 per share on a diluted basis (Q1 2023: $28 million, or $0.50 per share on a diluted basis).

Adjusted EBITDA and Operating Expenses

Adjusted EBITDA was $71 million, representing an increase of 83% year-over-year (Q1 2023: $39 million). This 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 28% (Q1 2023: 18%).

Operating expenses increased by 1% year-over-year to $207 million (Q1 2023: $205 million), mostly driven by planned growth investments partially offset by cost efficiencies. Non-GAAP operating expenses were flat at $155 million (Q1 2023: $155 million).

Cash Flow, Cash and Financial Liquidity Position

Cash flow from operating activities was $14 million in Q1 2024 (Q1 2023: $42 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 $1 million in Q1 2024 (Q1 2023: $9 million).

Cash and cash equivalents, and marketable securities, decreased $70 million compared to December 31, 2023 to $289 million, after spending $62 million on share repurchases in the first three months of 2024.

As of March 31, 2024, the Company had total financial liquidity of approximately $805 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 May 2, 2024.

Fiscal year 2024 guidance:

• We now expect Contribution ex-TAC to grow high-single-digit at constant currency, compared to our previous guidance of mid-single-digit growth at constant currency.
• We now expect an Adjusted EBITDA margin of approximately 31% of Contribution ex-TAC, compared to our previous guidance of 29% to 30% of Contribution ex-TAC.

Second quarter 2024 guidance:

• We expect Contribution ex-TAC between $261 million and $265 million, or year-over-year growth at constant-currency of +10% to +12%.
• We expect Adjusted EBITDA between $70 million and $74 million.

The guidance for the second 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 149, a U.S. dollar-British pound rate of 0.785, a U.S. dollar-Korean Won rate of 1,342 and a U.S. dollar-Brazilian real rate of 4.95.

The guidance assumes that no additional acquisitions are completed during the second quarter of 2024 or the fiscal year ended December 31, 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.

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. 

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