Criteo SA · NASDAQ:CRTO
Criteo SA — Q1 2023 Earnings Presentation
26 slides from Criteo SA's earnings presentation, May 3, 2023
Slide 1: Q1 2023 Earnings
CRITEO CRITEO Q1 2023 Earnings May 3, 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: Criteo is the Commerce Media Platform for the open internet
Criteo is the Commerce Media Platform for the open internet, Ideally Positioned to Complement Amazon 4
Slide 5: Q1 Business Momentum
Q1 Business Momentum Q1 2023 Contribution ex-TAC Mix & Growth1 • New solutions represented 44% of CxT as of Q1 2023, vs. 29% a year ago • 37% of our live clients using more than one Criteo solution, vs. a third a year ago 15% • 35% of media spend activated through agencies, vs. 32% a year ago 68% •
Slide 6: Expansion of our Retail Media Footprint
Expansion of our Retail Media Footprint Long-Term Relationships with Retailers 200 Retailers, incl. ~50% of Top 25 US & EMEA Retailers +122% Same-retailer CxT retention in Q1 2023 2,300+ Brands1 2+ years Average contract duration ~$214M in Activated Media Spend in Q1’23 Renewed exclusive with +56% Y
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 campaigns Client Case Study: Large Marketplace How People Build hyper-focused commerce audiences • Full funnel activation led to Like media spend x3 year-over- y
Slide 8: Financial & Operational Update
Financial & Operational Update Sarah Glickman, Chief Financial Officer
Slide 9: Q1 2023 financial results vs. guidance
vs. Signal Loss % YoY Q1 guidance Impacts3 Activated Media Spend1 $816M +37%2 Revenue $445M -9%2 Above as Contribution ex-TAC $221M +6.3%2 reported, $(4M) In line at cc Adj. EBITDA $39M -38% Above Net Loss4 $(12)M NM Non-GAAP Diluted EPS $0.46 -13% Free Cash Flow $8.7M -87% 1. Activated media spend
Slide 10: Retail Media
Retail Media Contribution ex-TAC of $158M, down -10% in Q1’231 Contribution ex-TAC of $37M, up +22% in Q1’231 • Commerce Audiences, up +27% • +34% growth in activated media spend • Traction of full-funnel activation to achieve • +122% Same-retailer CxT retention customer acquisition and retention ob
Slide 11: Ample financial flexibility to support growth, M&A and share repurchase
Ample financial flexibility to support organic growth investments, M&A and share repurchase program Free cash flow Cash & cash Balance sheet – ($M) equivalents ($M) Total assets ($M) ~$814M1 total financial liquidity and no long-term debt 373 69 $480M active repurchase 2,349 338 2,191 program with $
Slide 12: We Expect Solid Growth in 2023
We Expect Solid Growth in 2023 Uncertain and volatile macro-environment, traction of new solutions and contribution from Backdrop Iponweb acquisition FY 2023 Q2 2023 Targeting high-single-digit to low-double- $228M to $234M, or +8% to +10% Y/Y Contribution digit growth at constant currency growth at
Slide 13: Huge Market Opportunity
Huge Market Opportunity Leadership in fast- growing Commerce and Retail Media market with $110B SAM 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 media monet
Slide 14: Appendix
Appendix
Slide 15: 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 15 clients and the media spend activated by Iponweb 2. Includes Iponweb
Slide 16: Criteo Best-in-Class AI Technology is 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 17: Awards and recognition
Megan Clarken, Criteo CEO 2022 Winner of AdAge’s Leading Criteo became a Criteo named 2022 Criteo ranked #4 on 2022 Criteo named one of the Top Women in the member of 2023 Best Company LinkedIn Top Companies list for 12 hottest AdTech companies Bloomberg Gender- Culture by Marketing and Advertising
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 Q1’23 YoY2 Q4’22 Q3’22 Q2’22 Q1’22 192.6 158.0 177.9 186.1 Marketing Solutions1 158.2 -10% -7% +1% +2% +2% 150.2 126.0 148.7 158.3 Retargeting 124.3 -17% -13% -5% -1% 0% 42.4 32.0 29.2 27.8 Commerce Audiences 33.8 +27% +22% +29% +21% +34% 57.1 36.9 36.6 30.8 Retail Media1 3
Slide 21: Gross profit to Contribution ex-TAC
$ in millions Q1’23 Q4’22 Q3’22 Q2’22 Q1’22 $ in millions 2022 2021 Gross Profit 181.5 246.6 179.6 185.0 184.0 Gross Profit 795.2 781.9 Other Cost of Other Cost of 39.1 36.8 33.8 29.6 32.9 133.0 138.9 Revenue Revenue Contribution ex- Contribution ex- 220.6 283.4 213.4 214.5 216.9 928.2 920.8 TAC TAC
Slide 22: Net income to Adjusted EBITDA
$ in millions Q1’23 Q4’22 Q3’22 Q2’22 Q1’22 2022 2021 Net income (12.1) 16.0 6.5 (33.0) 21.3 10.9 137.6 Adjustments: Financial income/expense (6.6) 6.4 (3.5) (15.9) (4.0) (17.1) 1.0 Provision for income taxes (4.6) 26.5 1.4 (7.1) 10.4 31.2 16.2 Equity awards 26.1 22.4 21.1 12.0 9.5 65.0 45.0 compens
Slide 23: Free cash flow reconciliation
YTD YTD ($ in millions) 2022 Q1’23 Q1’22 CASH FROM OPERATING ACTIVITIES 42.0 74.9 256.0 Acquisition of intangible assets, property, plant and (37.2) (10.9) (84.8) equipment Change in accounts payable related to intangible 4.0 5.3 29.0 assets, property, plant and equipment FREE CASH FLOW 8.7 69.4 200
Slide 24: Foreign Exchange Impact
24 t 8] Foreign Exchange Impact F Q1 2023 Actual USD million @ QI 2022 FX Actual Contribution ex-TAC $ 230.6 FSMGURO) $ 220.6 Q2 2023 Guidance* = Guidance USD million @ Q2 2022 FX Midpoint Contribution ex-TAC $ 234.7 FERRERS) $ 231.0 FY 2023 Guidance* - Guidance USD million @ FY 2022 FX Midpoint **
Slide 25: Streamlined 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