Criteo SA · NASDAQ:CRTO
Criteo SA — Q3 2023 Earnings Presentation
25 slides from Criteo SA's earnings presentation, Nov 2, 2023
Slide 1: Q3 2023 Earnings Investor Presentation
CRITEO CRITEO Q3 2023 Earnings Investor Presentation / November 2, 2023
Slide 2: Forward-looking statements
This presentation contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on our management’s beliefs and assumptions and on information currently available t
Slide 3: Progress on 2023 Priorities
Progress on 2023 Priorities Megan Clarken, Chief Executive Officer
Slide 4: Q3 Business Momentum
Q3 Business Momentum Q3 2023 Contribution ex-TAC Mix & Growth1 • New solutions represented 51% of CxT as of Q3’23, vs. 41% a year ago • 38% of our live clients using more than one Criteo solution, vs. 33% a year ago 15% • 33% of media spend activated through agencies, vs. 32% a year ago 68% • Client
Slide 5: Expansion of our Retail Media Footprint
Expansion of our Retail Media Footprint Launched Commerce Max DSP into GA 220 Retailers, incl. ~60% of Top 25 U.S. & ~50% of • First to unify the Retail Media ecosystem with a Top 20 EMEA Retailers multi-retailer, multi-channel, and multi-format approach 2,500+ Brands • Conversion rates more than do
Slide 6: Criteo Knows How People Like, Search, Buy
More clients transition to our full-funnel audience strategies to acquire and retain customers Activate full customer journey Criteo Knows campaigns How People Build hyper-focused commerce audiences Clients that have embraced the full Like power of our acquisition and retention solutions spent on av
Slide 7: AI has been part of Criteo's DNA since day one
• AI has been part of Criteo's DNA since day one • Access to the largest commerce dataset on the open internet to feed our commerce-driven AI models • Integration of Generative AI into our platform with a focus on improving performance, enhancing the user experience, and optimizing our service deliv
Slide 8: Financial & Operational Update
Financial & Operational Update Sarah Glickman, Chief Financial Officer
Slide 9: Q3 results vs. guidance
vs. % YoY Q3 guidance Activated Media Spend1 $1,039M +32%2 Revenue $469M +2%2 Contribution ex-TAC $245M +13%2 Above Adj. EBITDA $68M +36% Above Net Income $7M +2% Non-GAAP Diluted EPS $0.71 +34% Free Cash Flow $4M3 -82% 1. Activated media spend is defined as the sum of our Marketing Solutions revenu
Slide 10: Retail Media
Retail Media Contribution ex-TAC of $163M, up +1% in Q3’231 Contribution ex-TAC of $48M, up +29% in Q3’231 • Commerce Audiences up +31% • +39% growth in activated media spend • Traction of full-funnel activation to achieve • +123% Same-retailer CxT retention customer acquisition and retention object
Slide 11: Financial flexibility to support organic growth, M&A and share repurchase
Financial flexibility to support organic growth investments, M&A and share repurchase program Free cash flow Cash & cash Balance sheet – ($M) equivalents ($M) Total assets ($M) ~$747M1 total financial liquidity and $(32)M YTD, reflecting: no long-term debt - capex related to the planned 5-year renew
Slide 12: We Expect Solid Growth in 2023
We Expect Solid Growth in 2023 Backdrop Unsettled macro; continued traction of new solutions, including Iponweb FY 2023 Q4 2023 $296M to $302M, or +5% to +7% YoY Contribution +9% to +10% growth at constant currency growth at constant currency ex-TAC • Low-single-digit organic growth • High seasonali
Slide 13: Huge Market Opportunity
Huge Market Opportunity Leadership in fast- growing Commerce and Retail Media market with $110B SAM by 2025 13 Strong Financials Sustainable growth, rebalanced revenue and high margin Differentiated Technology 17+ years of Al powering unified tech platform for Ist- party data-based marketing and med
Slide 14: Appendix
Appendix
Slide 15: Commerce solutions within segments
Note: Commerce Max and Commerce Yield are part of our Retail Media segment, Commerce Growth is included in Marketing Solutions and Commerce Grid is mainly part of Iponweb
Slide 16: Activated media spend
1. Activated media spend is defined as the sum of our Marketing Solutions revenue, the media spend activated on behalf of our Retail Media 16 clients and the media spend activated by Iponweb 2. Retailers that have a monetization program
Slide 17: Industry recognition and awards
Megan Clarken, Criteo was named as one of the Gartner Criteo recognized as Criteo CEO 12 providers that matter most in a Representative 2022 Winner of ”The Forrester WaveTM: Vendor in the May Omnichannel Demand-Side AdAge’s Leading Platforms, Q3 2023” 2023 Gartner® Market Criteo became a Criteo name
Slide 18: We are the Retail Media Partner of Choice (US)
We are the Retail Media Partner of Choice ~60% 2 years Top 25 U.S. Retailers1 Average contract duration2 Note: We partner with many of our retailer clients in a white label capacity 18 1. Retailers that have a monetization program 2. For retailer clients on Criteo’s Platform in the Americas
Slide 19: We are the Retail Media Partner of Choice (EMEA)
We are the Retail Media Partner of Choice ~50% 1.7 years Top 20 EMEA Retailers1 Average contract duration2 Note: We partner with many of our retailer clients in a white label capacity 19 1. Retailers that have a monetization program 2. For retailer clients on Criteo’s Platform in EMEA
Slide 20: Contribution ex-TAC by segment
Contribution ex-TAC in $m YoY2 Q3’23 Q2’23 Q1’23 Q4’22 Q3’22 Q2’22 Q1’22 167.6 158.2 192.6 158.0 177.9 186.1 Marketing Solutions1 +1% 163.3 -5% -10% -7% +1% +2% +2% 126.6 124.3 150.2 126.0 148.7 158.3 Retargeting -7% 120.7 -15% -17% -13% -5% -1% 0% 41.0 33.8 42.4 32.0 29.2 27.8 Commerce Audiences +3
Slide 21: Gross profit to Contribution ex-TAC
$ in millions Q3’23 Q2’23 Q1’23 Q4’22 Q3’22 Q2’22 Q1’22 $ in millions 2022 2021 Gross Profit 205.1 199.8 181.5 246.6 179.6 185.0 184.0 Gross Profit 795.2 781.9 Other Cost of Other Cost of 40.3 40.4 39.1 36.8 33.8 29.6 32.9 133.0 138.9 Revenue Revenue Contribution Contribution ex- 245.4 240.2 220.6 2
Slide 22: Net income to Adjusted EBITDA
$ in millions Q3’23 Q2’23 Q1’23 Q4’22 Q3’22 Q2’22 Q1’22 2022 2021 Net income (loss) 6.6 (2.0) (12.1) 16.0 6.5 (33.0) 21.3 10.9 137.6 Adjustments: Financial & other income / (expense) 3.0 2.0 (6.6) 6.4 (3.5) (15.9) (4.0) (17.1) 1.0 Provision for income taxes 1.8 1.1 (4.6) 26.5 1.4 (7.1) 10.4 31.2 16.
Slide 23: Free cash flow reconciliation
($ in millions) Q3’23 Q3’22 2022 CASH FROM OPERATING ACTIVITIES 19.6 41.6 256.0 Acquisition of intangible assets, property, plant and (16.3) (16.2) (84.8) equipment Change in accounts payable related to intangible 0.5 (4.1) 29.0 assets, property, plant and equipment FREE CASH FLOW 3.8 21.3 200.1 23
Slide 24: Contribution ex-TAC FX impact and guidance
Q3 2023 Actual FX USD million @ Q3 2022 FX Actual impact Contribution ex-TAC $ 240.5 $ 4.9 $ 245.4 Q4 2023 Guidance* FX Guidance USD million @ Q4 2022 FX impact M idpoint Contribution ex-TAC $ 300.8 $ (1.8) $ 299.0 FY 2023 Guidance* FX Guidance USD million @ FY 2022 FX impact M idpoint ** Contributi
Slide 25: Client Migration to the Platform
• Since June 2020, Criteo has been onboarding new Retail Media clients to its Platform • Revenue is recognized on a “net” basis on the Platform while it was accounted for on a gross basis for legacy solutions1 • Contribution ex-TAC, a non-GAAP measure, is not impacted by this Client Migration to the