Criteo SA · NASDAQ:CRTO
Criteo SA — Q2 2023 Earnings Presentation
26 slides from Criteo SA's earnings presentation, Aug 2, 2023
Slide 1: Q2 2023 Earnings
CRITEO CRITEO Q2 2023 Earnings August 2, 2023 Investor Presentation /
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: Q2 Business Momentum
Q2 Business Momentum Q2 2023 Contribution ex-TAC Mix & Growth1 • New solutions represented 47% of CxT as of Q2’23, vs. 31% a year ago • 37% of our live clients using more than one Criteo solution, vs. 33% a year ago 15% • 33% of media spend activated through agencies, vs. 31% a year ago 68% • Client
Slide 5: Retail Media expansion and SSP differentiation
Retail Media expansion Our SSP differentiation for Our SSP differentiation for publishers agencies Preferred access to commerce demand Access Criteo Commerce Audiences Programmatic demand for display ads packaged with premium supply onsite, bringing more third-party through any DSP to drive superior
Slide 6: Expansion of our Retail Media Footprint
Expansion of our Retail Media Footprint Pioneer in AI-driven Digital Retail Shelf Analytics 210 Retailers1, incl. ~50% of Top 25 US & EMEA Retailers • Received a US patent on Systems and Methods for Digital Shelf Display 2,400+ Brands • Provides brands with visibility into their share of ~$263M in A
Slide 7: Criteo Knows How People Like
More clients transition to our full-funnel audience strategies to acquire and retain customers Activate full customer journey Criteo Knows Commerce Audiences Share of campaigns Voice in Marketing Solutions How People Build hyper-focused commerce audiences Like Search Use ad formats built for every s
Slide 8: Best-in-Class AI Technology Purpose-Built for Commerce Predictions
Criteo Best-in-Class Al Technology is Purpose-Built for Commerce Predictions Al has been part of Criteo's DNA since day one Smarter bids to drive strong outcomes Predictive Bidding Identify and access the most relevant customers Commerce Audience Targeting Show the right products to the right shoppe
Slide 9: Financial & Operational Update
Financial & Operational Update Sarah Glickman, Chief Financial Officer
Slide 10: Q2 results vs. guidance
vs. Signal Loss % YoY Q2 guidance Impacts3 Activated Media Spend1 $949M +53%2 Revenue $469M -4%2 Contribution ex-TAC $240M +13%2 Above $(4M) Adj. EBITDA $56M +12% Above Net Loss4 $(2)M NM Non-GAAP Diluted EPS $0.49 +32% Free Cash Flow $(44)M NM 1. Activated media spend is defined as the sum of our M
Slide 11: Marketing Solutions, Retail Media and Iponweb
Retail Media Contribution ex-TAC of $167M, down -5% in Q2’231 Contribution ex-TAC of $44M, up +20% in Q2’231 • Commerce Audiences, up +41% • +35% growth in activated media spend • Traction of full-funnel activation to achieve • +118% Same-retailer CxT retention customer acquisition and retention obj
Slide 12: Ample financial flexibility to support growth, M&A and share repurchases
Ample financial flexibility to support organic growth investments, M&A and share repurchase program Free cash flow Cash & cash Balance sheet – ($M) equivalents ($M) Total assets ($M) ~$747M1 total financial liquidity and $(35)M YTD, reflecting: no long-term debt - capex related to the 373 planned 5-
Slide 13: We Expect Solid Growth in 2023
We Expect Solid Growth in 2023 Backdrop Unsettled macro; traction of new solutions, including Iponweb FY 2023 Q3 2023 Targeting high-single-digit to low-double- $238M to $242M, or +7% to +9% YoY Contribution digit growth at constant currency growth at constant currency ex-TAC • Low-single-digit orga
Slide 14: Huge Market Opportunity
Huge Market Opportunity Leadership in fast- growing Commerce and Retail Media market with $110B SAM by 2025 14 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 15: Appendix
Appendix
Slide 16: Activated media spend definitions
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. Includes Iponweb
Slide 17: Awards and recognition
Megan Clarken, Gartner Criteo recognized as Criteo named among 6 Criteo CEO a Representative notable large 2022 Winner of Vendor in the May omnichannel DSP AdAge’s Leading 2023 Gartner® Market platforms in Forrester's The Criteo became a Criteo named 2022 Omnichannel DSPs member of 2023 Best Company
Slide 18: We are the Retail Media Partner of Choice (US)
We are the Retail Media Partner of Choice ~50% 2 years1 Top 25 U.S. Retailers Average contract duration 18 Note: We partner with many of our retailer clients in a white label capacity 1. 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 years1 Top 20 EMEA Retailers Average contract duration 19 Note: We partner with many of our retailer clients in a white label capacity 1. For retailer clients on Criteo’s Platform in EMEA
Slide 20: Contribution ex-TAC by segment
Contribution ex-TAC in $m YoY2 Q2’23 Q1’23 Q4’22 Q3’22 Q2’22 Q1’22 158.2 192.6 158.0 177.9 186.1 Marketing Solutions1 -5% 167.6 -10% -7% +1% +2% +2% 124.3 150.2 126.0 148.7 158.3 Retargeting -15% 126.6 -17% -13% -5% -1% 0% 33.8 42.4 32.0 29.2 27.8 Commerce Audiences +41% 41.0 +27% +22% +29% +21% +34
Slide 21: Gross profit to Contribution ex-TAC
$ in millions Q2’23 Q1’23 Q4’22 Q3’22 Q2’22 Q1’22 $ in millions 2022 2021 Gross Profit 199.8 181.5 246.6 179.6 185.0 184.0 Gross Profit 795.2 781.9 Other Cost of Other Cost of 40.4 39.1 36.8 33.8 29.6 32.9 133.0 138.9 Revenue Revenue Contribution Contribution ex- 240.2 220.6 283.4 213.4 214.5 216.9
Slide 22: Net income to Adjusted EBITDA
$ in millions Q2’23 Q1’23 Q4’22 Q3’22 Q2’22 Q1’22 2022 2021 Net income (loss) (2.0) (12.1) 16.0 6.5 (33.0) 21.3 10.9 137.6 Adjustments: Financial & other income / (expense) 2.0 (6.6) 6.4 (3.5) (15.9) (4.0) (17.1) 1.0 Provision for income taxes 1.1 (4.6) 26.5 1.4 (7.1) 10.4 31.2 16.2 Equity awards 27
Slide 23: Free cash flow reconciliation
($ in millions) Q2’23 Q2’22 2022 CASH FROM OPERATING ACTIVITIES 1.3 14.0 256.0 Acquisition of intangible assets, property, plant and (24.3) (21.9) (84.8) equipment Change in accounts payable related to intangible (21.2) 6.5 29.0 assets, property, plant and equipment FREE CASH FLOW (44.2) (1.5) 200.1
Slide 24: Foreign Exchange Impact
24 Foreign Exchange Impact Q2 2023 Actual USD million @ Q2 2022 FX Contribution ex-TAC = $ 242.2 Actual (2.0) 3 240.2 Q3 2023 Guidance* FX Guidance impact Midpoint Contribution ex-TAC $ 229.6 tue $ 240.0 USD million @ Q2 2022 FX FY 2023 Guidance* Guidance USD milli million @ FY 2022 FX Midpoint ** C
Slide 25: Client count methodology
• We streamlined our client count methodology in Q1 2023. • Our new client count is based on unique billing accounts while our previous methodology included clients from whom we have received a signed contract or an insertion order during the previous 12 months. This change led to the consolidation
Slide 26: 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