Group 1 - ClearBridge Investments released its second-quarter 2025 investor letter for the ClearBridge Small Cap Strategy, highlighting volatility in small-cap stocks during the quarter [1] - The Russell 2000 Index rebounded 10% from its November 2024 record highs, driven by growth, momentum, high-beta, and low-quality stocks, but underperformed compared to the Russell 1000 Index, which returned 11.1% [1] - The ClearBridge Small Cap Strategy underperformed its benchmark during this period [1] Group 2 - Criteo S.A. (NASDAQ:CRTO) was highlighted in the investor letter, with a one-month return of -6.74% and a 52-week loss of 47.53% [2] - As of September 12, 2025, Criteo S.A. closed at $22.01 per share, with a market capitalization of $1.152 billion [2] - Concerns over Criteo's long-term growth and profitability forecasts were raised after its largest retail media client announced a significant reduction in the scope of Criteo's services starting in November [3] Group 3 - Criteo S.A. is not among the 30 most popular stocks among hedge funds, with 18 hedge fund portfolios holding the stock at the end of the second quarter, up from 15 in the previous quarter [4] - While Criteo is acknowledged for its investment potential, the company is viewed as having less upside compared to certain AI stocks, which are considered to carry less downside risk [4]

Core Insights - Criteo has announced a new integration with Google, becoming the first onsite retail media partner for Google, which is expected to enhance opportunities for brands in the digital commerce landscape [1][3]. Integration Details - The integration will start with a limited beta for select customers in the Americas via Google Search Ads 360, with plans for global expansion and inclusion of additional Google Marketing Platform tools [2]. - Criteo's network of over 200 retailers will be able to receive demand from Google Search Ads 360, allowing advertisers to create, launch, and optimize campaigns efficiently [3]. Industry Impact - The retail media industry is projected to reach $204 billion by 2027, but spending is currently concentrated among a few dominant players. This integration aims to diversify the retail media landscape by enabling more retailers to attract advertising budgets [4][6]. - The partnership is designed to provide unified measurement for retailers, helping brands understand the incremental impact of their advertising, which can lead to better budget allocation and investment decisions [3][4]. Company Statements - Google emphasized the importance of connecting advertisers with customers during their shopping journey through onsite sponsored product ads, enhancing the overall advertising performance view [4]. - Criteo expressed excitement about partnering with Google to scale brand advertising for retailers, aiming to maximize the value of ad inventory and connect more brands to its global retail network [5].

Group 1 - The new CEO of Criteo, Michael Komasinski, expresses excitement about the opportunity to lead the company and believes in the growth potential of the platform ecosystem [1][2] - Komasinski emphasizes that platforms will continue to gain market share within the ecosystem, indicating a long-term trend towards platform dominance [2] - The CEO's background in the agency sector provides him with insights into the ecosystem, leading to a strategic focus on platform growth as a key priority for Criteo [2]

Summary of Criteo's Conference Call Company Overview - **Company**: Criteo - **CEO**: Michael Komasinski - **Duration of CEO Tenure**: Just over six months Strategic Goals and Outlook - Criteo aims to expand its position in the retail media ecosystem, which is identified as the fastest-growing sector in digital advertising [4][5] - The company is focused on enhancing its performance engine and leveraging significant data assets to drive AI opportunities [5][6] - Criteo's strategy includes exploring adjacent markets to capitalize on synergistic opportunities [6] Performance Media Segment - The resolution of cookie deprecation has provided stability in the addressability landscape, allowing Criteo to focus on product development rather than protecting existing products [8][11] - The company is enhancing its full funnel, cross-channel, and self-service capabilities to attract a larger advertiser base [11][12] - A potential 1% market share gain could translate to a double-digit million opportunity for Criteo's Commerce Grid Supply-Side Platform [12] Agency Relationships - Criteo has been building strong relationships with agencies, which control a significant portion of media investment decisions [15][16] - The company is underpenetrated in the agency segment, presenting substantial growth opportunities [24] - Criteo's products are designed to be complementary to agency offerings, enhancing efficiency in retail media buying [15][17] Commerce Go Product - Commerce Go is a self-service tool aimed at SMB advertisers, currently in early rollout with 15% to 20% of long-tail clients migrated [27][29] - The product simplifies campaign management, allowing users to set up campaigns with minimal clicks [27][28] Connected TV (CTV) Opportunity - Criteo recognizes CTV as a rapidly growing segment and is developing audience products in partnership with platforms like Roku [31][32] - The company aims to integrate CTV as a biddable supply channel to influence consumer behavior [32][33] Meta Partnership - Criteo's partnership with Meta is growing at a rate of 30%, focusing on cross-channel performance [37] Agentic Commerce and GenAI - Criteo is preparing for the future of commerce through agentic commerce, which involves integrating with large language models and enhancing data capabilities [41][42] - The company is exploring monetization strategies for agentic commerce while ensuring its data infrastructure is robust [43][50] - AI is being integrated into Criteo's products to enhance efficiency and user experience, with significant improvements in audience building and campaign management [54][56] Retail Media Products - Criteo is scaling its retail media offerings, with new formats like on-site video and auction-based display driving incremental revenue [61][62] - The company is focused on holistic page optimization to balance e-commerce and advertising objectives [62][63] - Criteo is piloting programmatic solutions to address supply-demand imbalances in retail media [63][64] Conclusion - Criteo is strategically positioned to leverage its data assets and enhance its product offerings in the rapidly evolving digital advertising landscape, particularly in retail media and connected TV. The focus on agency relationships and self-service tools like Commerce Go indicates a commitment to expanding its market share and driving growth in activated media spend.

Core Viewpoint - Criteo S.A. will present at the Citi 2025 Global TMT Conference on September 4, 2025, showcasing its role in the commerce ecosystem [1] Company Overview - Criteo is a global platform that connects the commerce ecosystem for brands, agencies, retailers, and media owners [2] - The company utilizes an AI-powered advertising platform with access to over $1 trillion in annual commerce sales, facilitating connections with shoppers and enabling personalized experiences [2] - Criteo serves thousands of clients and partnerships across global retail and digital commerce, providing technology, tools, and insights for performance and growth [2]

Group 1 - Criteo S.A. is considered meaningfully undervalued due to internal improvements and exposure to long-term growth trends [1] - The company has successfully repositioned itself into a broad-based commerce media model over the past few years [1] Group 2 - The analyst has over 13 years of diverse financial analysis experience across various sectors, including Auto, Industrials, and IT [1] - The analyst's background includes managing investor relations and strategic finance for a listed IT company with a market cap of approximately USD 2.5 billion [1] - The analyst has developed strong expertise in market analysis, valuation models, and investment strategy [1]

```markdown PART I FINANCIAL INFORMATION This section provides comprehensive financial data, including unaudited statements, management's analysis, market risk, and internal controls [Item 1 Unaudited Financial Statements as of June 30, 2025](index=3&type=section&id=Item%201%20Unaudited%20Financial%20Statements%20as%20of%20June%2030%2C%202025) This section presents Criteo S.A.'s unaudited condensed consolidated financial statements for the period ended June 30, 2025, prepared in accordance with GAAP. It includes the statements of financial position, income, comprehensive income, shareholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, segment information, and specific financial line items [Condensed Consolidated Statements of Financial Position (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Position%20(Unaudited)) The Condensed Consolidated Statements of Financial Position provide a snapshot of the company's assets, liabilities, and shareholders' equity as of June 30, 2025, compared to December 31, 2024 Condensed Consolidated Statements of Financial Position (Unaudited) (in millions) | | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | **Assets** | | | | Total current assets | $1,026.0 | $1,224.1 | | Total noncurrent assets | $1,088.1 | $1,042.3 | | **Total assets** | **$2,114.1** | **$2,266.4** | | **Liabilities** | | | | Total current liabilities | $833.5 | $1,046.6 | | Total noncurrent liabilities | $153.1 | $138.8 | | **Total liabilities** | **$986.6** | **$1,185.4** | | **Shareholders' equity** | | | | Total equity | $1,127.5 | $1,081.1 | | **Total equity and liabilities** | **$2,114.1** | **$2,266.4** | - **Total assets decreased from $2,266.4 million** at December 31, 2024, to **$2,114.1 million** at June 30, 2025. **Total liabilities decreased from $1,185.4 million to $986.6 million**, while **total equity increased from $1,081.1 million to $1,127.5 million**[15](index=15&type=chunk) [Condensed Consolidated Statements of Income (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Unaudited)) The Condensed Consolidated Statements of Income present the company's revenues, costs, and net income for the three and six months ended June 30, 2025, compared to the same periods in 2024 Condensed Consolidated Statements of Income (Unaudited) (in millions) | (in millions, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $482.7 | $471.3 | $934.1 | $921.4 | | Gross profit | $258.5 | $232.8 | $495.5 | $450.1 | | Income from operations | $30.5 | $36.9 | $78.6 | $47.3 | | Net Income | $22.9 | $28.1 | $62.9 | $36.6 | | Net income available to shareholders of Criteo S.A. | $21.2 | $27.0 | $59.2 | $34.2 | | Basic EPS | $0.40 | $0.49 | $1.11 | $0.62 | | Diluted EPS | $0.39 | $0.46 | $1.05 | $0.58 | - For the three months ended June 30, 2025, **revenue increased by 2% to $482.7 million**, while **net income decreased by 18% to $22.9 million**. For the six months ended June 30, 2025, **revenue increased by 1% to $934.1 million**, and **net income increased by 72% to $62.9 million**[17](index=17&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)) The Condensed Consolidated Statements of Comprehensive Income detail the net income and other comprehensive income (loss) components, such as foreign currency translation adjustments and actuarial gains on employee benefits, for the three and six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Comprehensive Income (Unaudited) (in millions) | (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $22.9 | $28.1 | $62.9 | $36.6 | | Foreign currency translation adjustments, net of taxes | $29.5 | ($9.4) | $46.8 | ($22.6) | | Actuarial gains on employee benefits, net of taxes | $0.0 | $0.4 | $0.3 | $0.2 | | Other comprehensive income (loss) | $29.6 | ($8.9) | $47.1 | ($22.4) | | Total comprehensive income | $52.5 | $19.1 | $110.0 | $14.2 | - **Total comprehensive income significantly increased** for both the three-month and six-month periods ended June 30, 2025, primarily driven by **positive foreign currency translation adjustments**, contrasting with losses in the prior year[20](index=20&type=chunk) [Condensed Consolidated Statements of Shareholder's Equity (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholder's%20Equity%20(Unaudited)) The Condensed Consolidated Statements of Shareholders' Equity detail the changes in each component of equity, including common shares, treasury stock, additional paid-in capital, accumulated other comprehensive loss, and retained earnings, for the periods ended June 30, 2025 and 2024 Condensed Consolidated Statements of Shareholder's Equity (Unaudited) (in millions) | (in millions, except share amounts) | Balance at Dec 31, 2024 | Balance at June 30, 2025 | | :--- | :--- | :--- | | Common shares | $1.9 | $1.9 | | Treasury Stock | ($125.3) | ($190.8) | | Additional paid-in capital | $709.6 | $715.2 | | Accumulated Other Comprehensive Income (Loss) | ($108.8) | ($64.5) | | Retained Earnings | $571.7 | $627.1 | | Equity - attributable to shareholders of Criteo S.A. | $1,049.2 | $1,089.0 | | Noncontrolling interest | $31.9 | $38.5 | | **Total equity** | **$1,081.1** | **$1,127.5** | - **Total equity increased from $1,081.1 million** at December 31, 2024, to **$1,127.5 million** at June 30, 2025, primarily due to **net income and positive other comprehensive income**, partially offset by share repurchases[22](index=22&type=chunk) - The company's board authorized an extension of the share repurchase program to up to **$805.0 million** of outstanding American Depositary Shares on January 31, 2025[22](index=22&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) The Condensed Consolidated Statements of Cash Flows categorize cash movements into operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Cash Flows (Unaudited) (in millions) | (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $60.9 | $31.2 | | Net cash used in investing activities | ($41.7) | ($35.2) | | Net cash used in financing activities | ($103.1) | ($102.1) | | Effect of exchange rates changes on cash and cash equivalents | ($1.0) | ($13.5) | | Net decrease in cash and cash equivalents and restricted cash | ($84.9) | ($119.6) | | Net cash and cash equivalents and restricted cash at the end of the period | $206.0 | $291.7 | - **Net cash provided by operating activities increased to $60.9 million** for the six months ended June 30, 2025, from **$31.2 million** in the prior year. **Net cash used in investing activities increased to $(41.7) million**, and **net cash used in financing activities increased to $(103.1) million**[23](index=23&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) These notes provide detailed explanations and disclosures for the unaudited condensed consolidated financial statements, covering significant accounting policies, segment information, specific balance sheet and income statement accounts, share-based compensation, income taxes, earnings per share, commitments, contingencies, and disaggregation of revenue and noncurrent assets [Note 1. Summary of Significant Accounting Policies](index=11&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the basis of presentation for the financial statements, the use of estimates, significant accounting policies, reclassifications, and accounting pronouncements not yet adopted, highlighting key changes and their potential impact - The unaudited condensed consolidated financial statements are prepared in accordance with **GAAP and SEC rules**, with certain information condensed or omitted[30](index=30&type=chunk) - During Q2 2025, the Company recorded **accelerated amortization of $7.9 million** and a **nonrecurring impairment charge of $0.9 million** related to internally developed intangible assets due to Alphabet Inc.'s decision not to deprecate third-party cookies[34](index=34&type=chunk) - Effective fiscal year 2025, the estimated useful life of certain servers and network equipment changed from **five to six years**[35](index=35&type=chunk) - New accounting standards **ASU 2023-09 (Income Tax Disclosures)** and **ASU 2024-03 (Expense Disaggregation Disclosures)** are effective for annual periods beginning after December 15, 2024, and December 15, 2026, respectively, with no expected material impact on consolidated financial statements[37](index=37&type=chunk)[38](index=38&type=chunk) [Note 2. Segment information](index=12&type=section&id=Note%202.%20Segment%20information) This note disaggregates the company's financial performance into two reportable segments: Retail Media and Performance Media, based on the management approach, and provides revenue, traffic acquisition costs (TAC), and Contribution ex-TAC for each segment - Criteo operates in two segments: **Retail Media** (revenue from brands, agencies, retailers for digital advertising inventory and services) and **Performance Media** (targeting capabilities, supply, and AdTech services)[39](index=39&type=chunk)[42](index=42&type=chunk) Revenue by Reportable Segment (in millions) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Retail Media | $60.9 | $54.8 | $120.4 | $105.6 | | Performance Media | $421.8 | $416.5 | $813.7 | $815.7 | | Total Revenue | $482.7 | $471.3 | $934.1 | $921.4 | Contribution ex-TAC by Reportable Segment (in millions) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Retail Media | $60.0 | $53.9 | $118.8 | $104.0 | | Performance Media | $232.1 | $213.2 | $437.6 | $416.9 | | Total Contribution ex-TAC | $292.1 | $267.1 | $556.4 | $521.0 | [Note 3. Cash, Cash Equivalents, and Marketable Securities](index=14&type=section&id=Note%203.%20Cash%20%2C%20Cash%20Equivalents%2C%20and%20Marketable%20Securities) This note details the fair value measurements of cash, cash equivalents, and marketable securities, categorizing them by level of input within the fair value hierarchy and presenting their breakdown by contractual maturities Cash and Cash Equivalents (in millions) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash (Level 1) | $187.3 | $251.5 | | Money Market funds (Level 1) | — | $12.5 | | Term deposits and notes (Level 2) | $18.4 | $26.8 | | Total | $205.7 | $290.7 | Marketable Securities (Held-to-maturity, in millions) | Maturity | June 30, 2025 | | :--- | :--- | | Due in one year | $17.9 | | Due in one to five years | $17.6 | | Total | $35.5 | [Note 4. Trade Receivables](index=15&type=section&id=Note%204.%20Trade%20Receivables) This note provides a breakdown of the company's trade receivables, net of allowances for credit losses, for the presented periods Trade Receivables Net Book Value (in millions) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade accounts receivables | $694.4 | $829.5 | | (Less) Allowance for credit losses | ($26.7) | ($28.6) | | Net book value at end of period | $667.8 | $800.9 | [Note 5. Goodwill](index=15&type=section&id=Note%205.%20Goodwill) This note details the allocation of goodwill to the Retail Media and Performance Media segments and the changes in its carrying amount for the period ended June 30, 2025 Goodwill by Segment (in millions) | Segment | Balance at January 1, 2025 | Currency translation adjustment | Balance at June 30, 2025 | | :--- | :--- | :--- | | Retail Media | $145.0 | $8.7 | $153.7 | | Performance Media | $370.2 | $11.0 | $381.2 | | Total | $515.2 | $19.7 | $534.9 | - **Total goodwill increased by $19.7 million to $534.9 million** at June 30, 2025, primarily due to **currency translation adjustments**[48](index=48&type=chunk) [Note 6. Other Current and Noncurrent Assets](index=15&type=section&id=Note%206.%20Other%20Current%20and%20Noncurrent%20Assets) This note provides a breakdown of other current and noncurrent assets, including prepayments, restricted cash, and an indemnification asset related to the Iponweb Acquisition Other Current Assets (in millions) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Prepayments to suppliers | $43.3 | $40.6 | | Other current assets | $8.3 | $10.3 | | Total | $51.6 | $50.9 | - Other noncurrent assets primarily consist of a **$49.9 million indemnification asset** related to certain tax liabilities from the Iponweb Acquisition as of June 30, 2025[50](index=50&type=chunk) [Note 7. Other Current and Noncurrent Liabilities](index=16&type=section&id=Note%207.%20Other%20Current%20and%20Noncurrent%20Liabilities) This note details the components of other current and noncurrent liabilities, including rebates, customer prepayments, and uncertain tax positions Other Current Liabilities (in millions) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Rebates | $25.6 | $32.0 | | Customer prepayments and deferred revenue | $8.6 | $9.6 | | Accounts payable relating to capital expenditures | $4.6 | $1.8 | | Other creditors | $4.0 | $6.4 | | Total | $42.7 | $49.8 | Other Noncurrent Liabilities (in millions) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Uncertain tax positions | $19.2 | $18.9 | | Other | $3.4 | $1.3 | | Total | $22.6 | $20.2 | - **Uncertain tax positions**, primarily related to the Iponweb Acquisition, constitute a significant portion of other noncurrent liabilities[51](index=51&type=chunk) [Note 8. Leases](index=17&type=section&id=Note%208.%20Leases) This note presents the components of lease expense, including operating lease expense, short-term lease expense, variable lease expense, and sublease income Total Operating Lease Expense (in millions) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Lease expense | $8.9 | $10.2 | $16.9 | $20.1 | | Short term lease expense | $0.1 | $0.3 | $0.2 | $0.6 | | Variable lease expense | $0.5 | $0.4 | $1.0 | $0.7 | | Sublease income | ($0.3) | ($0.4) | ($0.6) | ($0.8) | | Total operating lease expense | $9.2 | $10.5 | $17.4 | $20.6 | [Note 9. Employee Benefits](index=17&type=section&id=Note%209.%20Employee%20Benefits) This note describes the company's defined benefit and defined contribution plans, including changes in projected benefit obligations, actuarial assumptions, and contributions to defined contribution plans Projected Benefit Obligation (in millions) | Item | Accumulated postretirement benefit obligation | | :--- | :--- | | Balance at December 31, 2024 | $4.7 | | Service cost | $0.4 | | Interest cost | $0.1 | | Actuarial losses (gains) | ($0.3) | | Currency translation adjustment | $0.6 | | Balance at June 30, 2025 | $5.5 | Defined Contributions Plans Expense (in millions) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Defined contributions plans included in personnel expenses | $6.7 | $6.1 | $11.0 | $10.3 | - The company's defined benefit plans, primarily for French employees, saw an **increase in projected benefit obligation to $5.471 million** at June 30, 2025, with key actuarial assumptions including a **4.2% discount rate** and **7.0% expected salary increase**[54](index=54&type=chunk)[55](index=55&type=chunk)[57](index=57&type=chunk) [Note 10. Share-Based Compensation](index=19&type=section&id=Note%2010.%20Share-Based%20Compensation) This note details the equity awards compensation expense, including Restricted Stock Units (RSUs), Performance Stock Units (PSUs), Lock-up shares, Nonemployee warrants, and Stock Options, along with their vesting schedules and unrecognized compensation Total Equity Awards Compensation Expense (in millions) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Research and Development | $10.4 | $23.7 | | Sales and Operations | $12.8 | $10.1 | | General and Administrative | $14.0 | $14.2 | | Total equity awards compensation expense | $37.2 | $48.0 | | Tax benefit from equity awards compensation expense | $5.7 | $5.1 | | Total equity awards compensation expense, net of tax effect | $31.5 | $42.9 | - As of June 30, 2025, unrecognized stock-based compensation for RSUs was approximately **$95.2 million** (weighted-average period of **3.3 years**), for Financial PSUs was **$14.4 million** (**3.1 years**), and for TSR PSUs was **$16.6 million** (April 1, 2025 to March 1, 2028)[65](index=65&type=chunk)[69](index=69&type=chunk)[71](index=71&type=chunk) - All Lock-up Shares and Nonemployee warrants were **fully vested** as of December 31, 2024, and June 30, 2025, respectively, with **no remaining unrecognized compensation expense**[72](index=72&type=chunk)[75](index=75&type=chunk) [Note 11. Financial and Other Income and Expenses](index=23&type=section&id=Note%2011.%20Financial%20and%20Other%20Income%20and%20Expenses) This note provides a breakdown of financial and other income and expenses, highlighting the main drivers of changes between periods Financial and Other Income (Expense) (in millions) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Financial income from cash equivalents | $1.2 | $1.6 | $2.9 | $3.8 | | Interest and fees | ($0.7) | ($0.4) | ($1.1) | ($0.8) | | Foreign exchange loss | ($2.2) | ($1.4) | ($1.2) | ($0.6) | | Discounting impact | — | $0.0 | — | ($1.8) | | Other financial income (expense) | ($0.1) | ($0.1) | ($0.1) | $0.2 | | Total Financial and Other (Expense) Income | ($1.8) | ($0.3) | $0.5 | $0.9 | - For the three months ended June 30, 2025, **financial and other expense increased by $1.5 million**, primarily due to **increased foreign exchange losses**, partially offset by less interest income. For the six months, it **decreased by $0.4 million**, mainly due to the accretion of the Iponweb earn-out liability in 2024, partially offset by decreased interest income[79](index=79&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) [Note 12. Income Taxes](index=24&type=section&id=Note%2012.%20Income%20Taxes) This note explains the determination of the tax provision for interim periods, discusses the impact of global minimum tax rules (Pillar Two), and the recently enacted One Big Beautiful Bill Act (OBBBA), and presents the provision for income taxes - The tax provision for interim periods is based on an **estimated annual effective tax rate (AETR)**, adjusted for discrete items[80](index=80&type=chunk) - The adoption of **OECD's Pillar Two Model Rules (global minimum tax)** did not have a material impact for the six months ended June 30, 2025, but the Company continues to assess its ongoing impact[81](index=81&type=chunk) - The **One Big Beautiful Bill Act (OBBBA)**, enacted on July 4, 2025, had no impact on Q2 2025 effective tax rate, and the Company is evaluating its impact on future financial statements[82](index=82&type=chunk) Provision for Income Taxes (in millions) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Provision for Income taxes | $16.2 | $11.6 | [Note 13. Earnings Per Share](index=24&type=section&id=Note%2013.%20Earnings%20Per%20Share) This note details the calculation of basic and diluted earnings per share (EPS) for the three and six months ended June 30, 2025 and 2024, including the impact of potentially dilutive securities Basic Earnings Per Share (in millions) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income attributable to shareholders of Criteo S.A. | $21.2 | $27.0 | $59.2 | $34.2 | | Weighted average number of shares outstanding | 52,986,068 | 54,684,560 | 53,480,338 | 54,915,140 | | Basic earnings per share | $0.40 | $0.49 | $1.11 | $0.62 | Diluted Earnings Per Share (in millions) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income attributable to shareholders of Criteo S.A. | $21.2 | $27.0 | $59.2 | $34.2 | | Diluted shares | 55,133,569 | 58,974,186 | 56,162,459 | 59,151,582 | | Diluted earnings per share | $0.39 | $0.46 | $1.05 | $0.58 | - The weighted average number of anti-dilutive securities excluded from diluted EPS was **1,349,639** for the six months ended June 30, 2025, compared to **454,891** in the prior year[88](index=88&type=chunk) [Note 14. Commitments and contingencies](index=25&type=section&id=Note%2014.%20Commitments%20and%20contingencies) This note outlines the company's legal and regulatory matters, including ongoing lawsuits and non-income tax risks, and management's estimates of their potential impact - The CNIL issued a decision in June 2023, retaining alleged GDPR violations but reducing the financial sanction to **€40 million ($43.3 million)**, which Criteo paid and has appealed[91](index=91&type=chunk) - Criteo is a party to **two putative class action lawsuits** (Doe v. GoodRx Holdings, Inc. et al. and a new claim against CVS and others) alleging violations of various state and federal laws, which the company intends to vigorously defend[92](index=92&type=chunk)[93](index=93&type=chunk) - A **$31.7 million provision for non-income tax items**, identified during the Iponweb Acquisition in 2022, is fully offset by an indemnification asset recorded in other noncurrent assets[94](index=94&type=chunk) [Note 15. Disaggregation of Revenue and Noncurrent Assets](index=27&type=section&id=Note%2015.%20Disaggregation%20of%20Revenue%20and%20Noncurrent%20Assets) This note provides a detailed breakdown of the company's revenue by major product and geographical area, as well as noncurrent assets by geographical area Revenue Disaggregated by Major Product (in millions) | Product | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Retail Media | $60.9 | $54.8 | $120.4 | $105.6 | | Commerce Growth | $393.9 | $387.6 | $759.2 | $760.4 | | Other | $27.9 | $28.9 | $54.5 | $55.3 | | Performance Media (Total) | $421.8 | $416.5 | $813.7 | $815.7 | | Total Revenue | $482.7 | $471.3 | $934.1 | $921.4 | Consolidated Revenue by Geographical Area (in millions) | Region | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Americas | $199.8 | $212.4 | $392.7 | $410.7 | | EMEA | $186.0 | $168.5 | $350.8 | $331.3 | | Asia-Pacific | $96.9 | $90.4 | $190.6 | $179.3 | Noncurrent Assets by Geographical Area (in millions) | Region | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Americas | $66.5 | $68.2 | | EMEA | $205.7 | $186.0 | | Asia-Pacific | $14.2 | $11.4 | | Total | $286.5 | $265.6 | [Note 16. Subsequent Events](index=28&type=section&id=Note%2016.%20Subsequent%20Events) This note confirms that the company evaluated all subsequent events through the issuance date of the financial statements and found no significant events requiring adjustment or disclosure - **No significant subsequent events** occurred after June 30, 2025, through the date of issuance of the unaudited condensed consolidated financial statements[100](index=100&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Criteo's financial condition and results of operations for the periods ended June 30, 2025, discussing key financial highlights, trends, opportunities, challenges, and liquidity. It also includes reconciliations of non-GAAP financial measures - Criteo is a global technology company leveraging its **Commerce Media Platform, AI, and commerce data** to drive superior commerce outcomes for marketers and media owners[27](index=27&type=chunk)[104](index=104&type=chunk) - **Non-GAAP financial measures**, such as **Contribution ex-TAC and Adjusted EBITDA**, are used by management to evaluate operating performance and provide supplemental information to investors[102](index=102&type=chunk)[103](index=103&type=chunk) [Current quarter financial highlights](index=29&type=section&id=Current%20quarter%20financial%20highlights) This section summarizes the key financial performance indicators for the three months ended June 30, 2025, highlighting changes in revenue, gross profit, Contribution ex-TAC, net income, Adjusted EBITDA, and cash flows - **Revenue for Q2 2025 increased by 2% to $482.7 million** (flat at constant currency), driven by growth in Retail Media and Performance Media[105](index=105&type=chunk) - **Gross profit for Q2 2025 increased by 11% to $258.5 million**, mainly due to lower traffic acquisition costs[105](index=105&type=chunk) - **Contribution ex-TAC for Q2 2025 increased by 9% to $292.1 million** (**7% at constant currency**), driven by growth in both Retail Media and Performance Media[106](index=106&type=chunk) - **Net income for Q2 2025 decreased by 18% to $22.9 million**, primarily due to growth investments and amortization of intangible assets[107](index=107&type=chunk) - **Adjusted EBITDA for Q2 2025 decreased by 4% to $89.4 million**, mainly due to planned growth investments[107](index=107&type=chunk) - **Cash flows used for operating activities was $(1.4) million** for Q2 2025, a decrease from **$17.2 million** in the prior year, reflecting reduced trade payables and higher income tax payments[108](index=108&type=chunk) [Trends, Opportunities and Challenges](index=30&type=section&id=Trends%2C%20Opportunities%20and%20Challenges) This section discusses key factors influencing Criteo's performance and future success, including the development of its Commerce Media Platform, macroeconomic conditions, seasonality in the advertising industry, and evolving privacy regulations - A major customer will curtail services starting November 1, 2025, which accounted for **4.6% of total revenue in 2024**[109](index=109&type=chunk) - Future growth depends on **retaining and scaling existing clients**, increasing platform usage, and adding new clients, leveraging unique commerce data, AI, and deep integrations[110](index=110&type=chunk) - Global economic and geopolitical volatility (trade policies, conflicts, inflation, interest rates) may negatively impact **advertising demand and consumer behavior**[111](index=111&type=chunk)[112](index=112&type=chunk) - The advertising industry experiences **seasonality**, with the third and fourth quarters historically reflecting the highest activity levels due to increased back-to-school and holiday purchasing[113](index=113&type=chunk) - Criteo is subject to **privacy laws (e.g., GDPR)** and measures by large tech companies (Google, Apple) causing signal loss, for which it has developed a multi-pronged addressability strategy[116](index=116&type=chunk) [Results of Operations for the Periods Ended June 30, 2025 and June 30, 2024 (Unaudited)](index=32&type=section&id=Results%20of%20Operations%20for%20the%20Periods%20Ended%20June%2030%2C%202025%20and%20June%2030%2C%202024%20(Unaudited)) This section provides a detailed analysis of Criteo's financial performance, breaking down revenue by segment and region, analyzing cost of revenue, Contribution ex-TAC, and operating expenses, and discussing financial and tax impacts [Revenue](index=32&type=section&id=Revenue) Revenue analysis by segment and geographical region, including constant currency comparisons, highlights growth drivers and impacts of currency fluctuations Revenue Breakdown by Segment (in millions) | Segment | Q2 2025 (Reported) | Q2 2024 (Reported) | Q2 % Change | H1 2025 (Reported) | H1 2024 (Reported) | H1 % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Retail Media | $60.9 | $54.8 | 11% | $120.4 | $105.6 | 14% | | Performance Media | $421.8 | $416.5 | 1% | $813.7 | $815.7 | 0% | | Total Revenue | $482.7 | $471.3 | 2% | $934.1 | $921.4 | 1% | - **Retail Media revenue increased 11%** (**11% constant currency**) in Q2 2025, driven by expansion in Retail Media onsite, particularly in the U.S. market[119](index=119&type=chunk) - **Performance Media revenue increased 1%** (decreased **1% constant currency**) in Q2 2025, driven by strength in travel, partially offset by soft retail trends and lower media trading marketplace spend[120](index=120&type=chunk) Revenue Breakdown by Region (in millions) | Region | Q2 2025 (Reported) | Q2 2024 (Reported) | Q2 % Change | H1 2025 (Reported) | H1 2024 (Reported) | H1 % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Americas | $199.8 | $212.4 | (6)% | $392.7 | $410.7 | (4)% | | EMEA | $186.0 | $168.5 | 10% | $350.8 | $331.3 | 6% | | Asia-Pacific | $96.9 | $90.4 | 7% | $190.6 | $179.3 | 6% | - **Americas revenue decreased (6)%** (or **(4)% constant currency**) in Q2 2025 due to soft retail trends, partially offset by Retail Media expansion. **EMEA revenue increased 10%** (or **5% constant currency**) due to Retail Media traction and strong Travel performance. **Asia-Pacific revenue increased 7%** (or **3% constant currency**) due to solid Travel and Classified trends[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk) [Cost of Revenue](index=35&type=section&id=Cost%20of%20Revenue) This section analyzes the changes in total cost of revenue, including traffic acquisition costs (TAC) by segment and other cost of revenue, for the three and six months ended June 30, 2025 Cost of Revenue (in millions) | Item | Q2 2025 | Q2 2024 | Q2 % Change | H1 2025 | H1 2024 | H1 % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Traffic acquisition costs | $190.6 | $204.2 | (7)% | $377.7 | $400.4 | (6)% | | Other cost of revenue | $33.6 | $34.2 | (2)% | $60.9 | $70.9 | (14)% | | Total cost of revenue | $224.2 | $238.5 | (6)% | $438.6 | $471.3 | (7)% | | % of revenue | 46% | 51% | | 47% | 51% | | | Gross profit % | 54% | 49% | | 53% | 49% | | - **Total cost of revenue decreased by $(14.3) million (6%)** in Q2 2025, primarily due to a **$(13.6) million (7%) decrease in traffic acquisition costs**, driven by a lower average price per impression[130](index=130&type=chunk) - **Traffic acquisition costs in Performance Media decreased by (7)%** (or **(9)% at constant currency**) in Q2 2025, mainly due to a **(15)% decrease in average CPM** for inventory purchased, despite a **9% increase in impressions**[132](index=132&type=chunk) - **Other cost of revenue decreased by $(0.7) million (2%)** in Q2 2025, mainly due to a decrease in depreciation of servers[133](index=133&type=chunk) [Contribution excluding Traffic Acquisition Costs](index=36&type=section&id=Contribution%20excluding%20Traffic%20Acquisition%20Costs) This section defines Contribution ex-TAC as a key non-GAAP profitability measure, reconciles it to gross profit, and presents its breakdown by segment, emphasizing its role in evaluating operating performance and strategic decisions - **Contribution ex-TAC is a non-GAAP profitability measure**, calculated by deducting traffic acquisition costs from revenue, and is a **key metric for management** to evaluate operating performance and make strategic decisions[138](index=138&type=chunk)[139](index=139&type=chunk) Reconciliation of Contribution ex-TAC to Gross Profit (in millions) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Gross Profit | $258.5 | $232.8 | $495.5 | $450.1 | | Other Cost of Revenue | $33.6 | $34.2 | $60.9 | $70.9 | | Contribution ex-TAC | $292.1 | $267.1 | $556.4 | $521.0 | Contribution ex-TAC by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | Q2 % Change | H1 2025 | H1 2024 | H1 % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Retail Media | $60.0 | $53.9 | 11% | $118.8 | $104.0 | 14% | | Performance Media | $232.1 | $213.2 | 9% | $437.6 | $416.9 | 5% | | Total | $292.1 | $267.1 | 9% | $556.4 | $521.0 | 7% | - **Contribution ex-TAC increased by $25.0 million (9%)** in Q2 2025 and **$35.5 million (7%)** in H1 2025, driven by growth in both Retail Media and Performance Media[141](index=141&type=chunk) [Constant Currency Reconciliation](index=38&type=section&id=Constant%20Currency%20Reconciliation) This section provides a reconciliation of reported financial results to constant currency figures for gross profit, Contribution ex-TAC, traffic acquisition costs, and revenue, to better represent underlying business trends Constant Currency Reconciliation (in millions) | Item | Q2 2025 (Reported) | Q2 2024 (Reported) | Q2 % Change | Q2 2025 (Constant Currency) | Q2 % Change (Constant Currency) | | :--- | :--- | :--- | :--- | :--- | :--- | | Gross Profit | $258.5 | $232.8 | 11% | N/A | N/A | | Contribution ex-TAC | $292.1 | $267.1 | 9% | $285.9 | 7% | | Traffic acquisition costs | $190.6 | $204.2 | (7)% | $186.8 | (9)% | | Revenue | $482.7 | $471.3 | 2% | $472.7 | 0% | [Research and Development Expenses](index=38&type=section&id=Research%20and%20Development%20Expenses) This section analyzes the changes in research and development expenses for the three and six months ended June 30, 2025, identifying the primary drivers of these changes Research and Development Expenses (in millions) | Item | Q2 2025 | Q2 2024 | Q2 % Change | H1 2025 | H1 2024 | H1 % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Research and development expenses | $79.6 | $59.6 | 33% | $140.4 | $126.5 | 11% | | % of revenue | 16% | 13% | | 15% | 14% | | - **R&D expenses increased by $20.0 million (33%)** in Q2 2025, mainly due to **higher amortization expense** from accelerated amortization of intangible assets related to third-party cookie deprecation, and increased headcount-related costs[143](index=143&type=chunk) [Sales and Operations Expenses](index=39&type=section&id=Sales%20and%20Operations%20Expenses) This section examines the changes in sales and operations expenses for the three and six months ended June 30, 2025, attributing them to specific cost drivers Sales and Operations Expenses (in millions) | Item | Q2 2025 | Q2 2024 | Q2 % Change | H1 2025 | H1 2024 | H1 % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Sales and operations expenses | $108.2 | $95.1 | 14% | $197.1 | $187.9 | 5% | | % of revenue | 22% | 20% | | 21% | 20% | | - **Sales and operations expenses increased by $13.1 million (14%)** in Q2 2025, primarily due to headcount-related costs from a one-time company-wide event and increased third-party services[145](index=145&type=chunk) [General and Administrative Expenses](index=39&type=section&id=General%20and%20Administrative%20Expenses) This section details the changes in general and administrative expenses for the three and six months ended June 30, 2025, and the factors contributing to these movements General and Administrative Expenses (in millions) | Item | Q2 2025 | Q2 2024 | Q2 % Change | H1 2025 | H1 2024 | H1 % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | General and administrative expenses | $40.2 | $41.2 | (2)% | $79.4 | $88.4 | (10)% | | % of revenue | 8% | 9% | | 9% | 10% | | - **G&A expenses decreased by $(1.0) million (2%)** in Q2 2025, mainly due to a decrease in third-party services, partially offset by increased headcount costs. For H1 2025, the **decrease of $(9.0) million (10%)** was primarily due to the change in earn-out fair value related to the Iponweb acquisition in 2024[147](index=147&type=chunk)[148](index=148&type=chunk) [Financial and Other Income](index=40&type=section&id=Financial%20and%20Other%20Income) This section analyzes the changes in financial and other income (expense) for the three and six months ended June 30, 2025, identifying the key factors influencing these fluctuations Financial and Other Income (Expense) (in millions) | Item | Q2 2025 | Q2 2024 | Q2 % Change | H1 2025 | H1 2024 | H1 % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Financial and Other Income (Expense) | ($1.8) | ($0.3) | 534% | $0.5 | $0.9 | (44)% | | % of revenue | (0.4)% | (0.1)% | | 0.1% | 0.1% | | - **Financial and Other Income (Expenses) increased by $1.5 million (534%)** in Q2 2025 due to **higher foreign exchange losses**, partially offset by less interest income. For H1 2025, it **decreased by $(0.4) million (44%)** due to the accretion of the Iponweb earn-out liability in 2024, partially offset by decreased interest income[150](index=150&type=chunk)[151](index=151&type=chunk) [Provision for Income Taxes](index=40&type=section&id=Provision%20for%20Income%20Taxes) This section discusses the provision for income taxes, including the drivers of changes for the three and six months ended June 30, 2025, and the impact of the French tax rate on technology royalties Provision for Income Taxes (in millions) | Item | Q2 2025 | Q2 2024 | Q2 % Change | H1 2025 | H1 2024 | H1 % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Provision for Income taxes | $5.7 | $8.6 | (33)% | $16.2 | $11.6 | 40% | | % of revenue | 1% | 2% | | 1% | 2% | | - The **provision for income tax expense decreased by $(2.9) million (33%)** in Q2 2025 due to lower income from operations and a lower effective tax rate. For H1 2025, it **increased by $4.6 million (40%)** due to higher income from operations[152](index=152&type=chunk)[153](index=153&type=chunk) - The effective tax rate differs from the nominal French rate of **25.0%** primarily due to the **reduced income tax rate on technology royalties in France**[153](index=153&type=chunk) [Adjusted EBITDA](index=41&type=section&id=Adjusted%20EBITDA) This section defines Adjusted EBITDA as a non-GAAP measure, reconciles it to net income, and presents comparative figures, explaining the drivers of changes for the three and six months ended June 30, 2025 - **Adjusted EBITDA is a non-GAAP measure** used by management to evaluate core operating performance, excluding financial income/expense, income taxes, depreciation, amortization, equity compensation, pension costs, acquisition/restructuring costs, and other nonrecurring items[155](index=155&type=chunk) Adjusted EBITDA Reconciliation (in millions) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $22.9 | $28.1 | $62.9 | $36.6 | | Total net adjustments | $66.5 | $65.4 | $118.6 | $127.5 | | Adjusted EBITDA | $89.4 | $93.4 | $181.5 | $164.1 | - **Adjusted EBITDA decreased by $(4.1) million (4%)** in Q2 2025, primarily due to increased operating expenses related to headcount costs from a one-time company-wide event. For H1 2025, **Adjusted EBITDA increased by $17.4 million (11%)** due to higher gross profit[157](index=157&type=chunk)[158](index=158&type=chunk) - Adjustments to Net Income for Q2 2025 included **$7.9 million in accelerated amortization** and a **$0.9 million impairment charge** related to internally developed intangible assets due to Alphabet Inc.'s decision on third-party cookies[156](index=156&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses Criteo's cash position, available liquidity, share buy-back programs, off-balance sheet arrangements, capital expenditure requirements, and historical cash flow activities (operating, investing, and financing) - As of June 30, 2025, **cash and cash equivalents, and restricted cash totaled $206.0 million**, a **decrease of $(84.9) million** from December 31, 2024[160](index=160&type=chunk) - **Total liquidity**, including the Revolving Credit Facility (**€407.0 million or $477.0 million**), cash position, marketable securities, and treasury shares, was **above $745.7 million** as of June 30, 2025[161](index=161&type=chunk) - For the six months ended June 30, 2025, the company repurchased **$104.5 million of shares**, with the share repurchase program extended to up to **$805.0 million** in January 2025[162](index=162&type=chunk)[163](index=163&type=chunk) - **Net capital expenditures were $(52.0) million** for H1 2025, primarily for data center and server equipment and capitalized software development, and are expected to remain at or slightly above **5% of revenue** for 2025[165](index=165&type=chunk) Historical Cash Flows (in millions) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Cash provided by operating activities | $60.9 | $31.2 | | Cash used in investing activities | ($41.7) | ($35.2) | | Cash used in financing activities | ($103.1) | ($102.1) | - The **increase in cash from operating activities in H1 2025** was mainly due to higher net income and improved working capital, partially offset by income taxes paid. The **increase in cash used in investing activities** was due to higher software development costs, and in **financing activities** due to increased share repurchases[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) [Critical Accounting Policies and Estimates](index=44&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section states that there have been no material changes to the company's critical accounting policies and estimates since the last annual report - **No material changes** to critical accounting policies and estimates from the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[174](index=174&type=chunk) [Recently Issued Pronouncements](index=44&type=section&id=Recently%20Issued%20Pronouncements) This section refers to Note 1 for a discussion of recently issued accounting standards - Refer to **Note 1, 'Summary of Significant Accounting Policies,'** for a discussion of certain accounting standards issued during 2025[175](index=175&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses Criteo's exposure to market risks, primarily foreign currency exchange rate fluctuations, and provides a hypothetical impact analysis of currency changes on net income - Criteo is mainly exposed to **foreign currency exchange rate fluctuations**, with **no material changes** to market risk exposure during the six months ended June 30, 2025[176](index=176&type=chunk) Hypothetical 10% Currency Impact on Net Income (Loss) (in millions) | Currency | Six Months Ended June 30, 2025 (+10%) | Six Months Ended June 30, 2025 (-10%) | Six Months Ended June 30, 2024 (+10%) | Six Months Ended June 30, 2024 (-10%) | | :--- | :--- | :--- | :--- | :--- | | GBP/USD | $0.3 | ($0.3) | $0.2 | ($0.2) | | BRL/USD | ($0.1) | $0.1 | $0.1 | ($0.1) | | JPY/USD | $4.9 | ($4.9) | $3.1 | ($3.1) | | EUR/USD | ($1.3) | $1.3 | $3.2 | ($3.2) | [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of Criteo's disclosure controls and procedures as of June 30, 2025, and states that there were no material changes in internal control over financial reporting. It also acknowledges the inherent limitations of control systems - Management concluded that **disclosure controls and procedures were effective** as of June 30, 2025, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[179](index=179&type=chunk) - **No changes in internal control over financial reporting** materially affected, or are reasonably likely to materially affect, internal control over financial reporting during the period[180](index=180&type=chunk) - Control systems provide only reasonable, not absolute, assurance, and can be subject to inherent limitations such as faulty judgments, simple errors, circumvention by individuals, collusion, or management override[181](index=181&type=chunk) PART II OTHER INFORMATION This section presents additional disclosures on legal proceedings, risk factors, equity sales, other information, and exhibits [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 14 for a discussion of the company's legal proceedings and related commitments and contingencies - For a discussion of legal proceedings, refer to **Note 14. Commitments and contingencies**[182](index=182&type=chunk) [Item 1A. Risk Factors](index=47&type=page&id=Item%201A.%20Risk%20Factors) This section directs readers to the company's Annual Report on Form 10-K and previous Quarterly Report on Form 10-Q for a comprehensive discussion of risk factors, noting no material changes - **No material changes** to the Risk Factors described in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2025[183](index=183&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides information on the company's purchases of its equity securities (ADSs) during the second fiscal quarter of 2025 under its publicly announced share repurchase program Purchases of Equity Securities by the Issuer (Q2 2025) (in millions) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | | :--- | :--- | :--- | :--- | :--- | | April 1 to 30, 2025 | 427,848 | $31.18 | 427,848 | $149.7 | | May 1 to 31, 2025 | 751,320 | $27.81 | 751,320 | $128.8 | | June 1 to 30, 2025 | 548,084 | $25.68 | 548,084 | $114.7 | | Total | 1,727,252 | | 1,727,252 | | - On January 31, 2025, the Board of Directors authorized an **increase of the share repurchase program from up to $630.0 million to up to $805.0 million**[185](index=185&type=chunk) [Item 5. Other Information](index=48&type=section&id=Item%205.%20Other%20Information) This section states that no directors or Section 16 officers adopted or terminated any Rule 10b5-1 trading arrangements during the second fiscal quarter of 2025 - **No directors or Section 16 officers adopted or terminated any Rule 10b5-1 trading arrangement** or 'non-Rule 10b5-1 trading arrangement' during the three months ended June 30, 2025[186](index=186&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section provides an index of exhibits filed with the Form 10-Q, including by-laws, CEO/CFO certifications, and XBRL documents Exhibit Index (in millions) | Exhibit | Description | | :--- | :--- | | 3.1 | Update to By-laws (status) of Criteo S.A. (English Translation) | | 31.1 | Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended | | 31.2 | Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended | | 32.1* | Certificate of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended | | 101.INS | XBRL Instance Document | | 101.SCH | XBRL Taxonomy Extension Schema Document | | 101.CAL | XBRL Taxonomy Extension Calculation Link base Document | | 101.DEF | XBRL Taxonomy Extension Definition Link base Document | | 101.LAB | XBRL Taxonomy Extension Labels Linkbase Document | | 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | | 104 | Cover Page Interactive Data File, formatted in Inline XBRL and contained in Exhibit 101. | [Signatures](index=50&type=section&id=Signatures) This section contains the signature of the registrant, Criteo S.A., by its Chief Financial Officer, certifying the filing of the report - The report is signed by **Sarah Glickman, Chief Financial Officer of Criteo S.A.**, on July 31, 2025[193](index=193&type=chunk) ```

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $483 million, with contribution ex TAC increasing to $292 million, reflecting a year-over-year tailwind from foreign currencies of $6 million [28] - At constant currency, Q2 contribution ex TAC grew by 7% year-over-year, representing growth of 21% on a two-year stack basis [28] - Adjusted EBITDA for Q2 2025 was $89 million, reflecting strong operational leverage from top-line growth and cost discipline [33] - Net income for Q2 2025 was $23 million, resulting in diluted earnings per share of $0.39 and adjusted diluted EPS of $0.92 [34] Business Line Data and Key Metrics Changes - In Performance Media, revenue was $422 million, with contribution ex TAC up 6% at constant currency or 17% on a two-year stack basis [29] - Retail Media revenue was $61 million, with contribution ex TAC growing 11% at constant currency, representing a 35% increase on a two-year stack [31] - Campaign volume for Commerce Go grew 200% quarter-over-quarter, driven by increasing adoption from SMB advertisers and lower churn [18] Market Data and Key Metrics Changes - Travel vertical grew by 28% in Q2 2025, with notable strength in APAC driven by full funnel activation [20] - Retail spending, particularly in fashion, was down 6%, indicating challenges in certain sectors [30] - Media spend in Q2 grew 20% year-over-year, demonstrating share gains across a diversified client base [32] Company Strategy and Development Direction - The company is focused on delivering full funnel, cross-channel, self-service advertising, leveraging unique commerce data and AI [6] - A renewed focus on performance media and accelerated AI innovation is expected to drive the next phase of growth [15] - The company is expanding its partnerships with agencies, including a significant partnership with Dentsu, to enhance its commerce media platform [10] Management's Comments on Operating Environment and Future Outlook - Management noted a slow start to the quarter but observed better macro trends in May, with a relatively stable environment since then [28] - The company anticipates positive free cash flow generation in the second half of the year, with a free cash flow conversion rate above 45% of adjusted EBITDA [35] - For 2025, the company expects contribution ex TAC to grow 3% to 4% year-over-year at constant currency, with growth in each segment [37] Other Important Information - The company has a strong financial position with $746 million in total liquidity and no long-term debt [36] - The company is committed to disciplined capital allocation, including investments in high ROI organic investments and share buyback programs [36] Q&A Session Summary Question: What is the monetization strategy for the AgenTic AI product? - The monetization strategies for AgenTic AI are still being determined, with options ranging from affiliate programs to sponsored citations [43][46] Question: Are clients actively spending on AgenTic AI? - It is early days in discussions, with retailers focusing on controlling data flows and ensuring relevance in the shopper journey [53][55] Question: Can you elaborate on the agency relationships and their impact on financials? - The agency relationships are structured around shared economics, data integration, and co-development strategies, with strong traction in agency spending [58][63] Question: What is the outlook for CTV and its value to advertisers? - CTV is seen as a promising channel for performance-based advertising, with the ability to tie advertising to sales lift [81][84] Question: How is the Miracle partnership expected to impact market penetration? - The Miracle partnership is aimed at unlocking demand from third-party sellers in the mid to long tail, enhancing Criteo's value proposition [74][75] Question: What is the current retailer count and outlook for retention? - The company now partners with over 230 retailers, with a strong base in the US and Europe, feeling confident about retaining its retailer base [77]

Q2 2025 Performance Highlights - Contribution ex-TAC reached $292 million, a 7% year-over-year increase[14] - Adjusted EBITDA margin was 31%, exceeding guidance[14] - Performance Media grew by 6% year-over-year, driven by Commerce Audiences and Retargeting trends[15] - Retail Media increased by 11% year-over-year[15] Retail Media Growth and Expansion - Retail Media media spend reached approximately $398 million, up 20% year-over-year[20,28] - Criteo has partnerships with over 200 retailers, including 70% of the Top 30 U S and 50% of the Top 30 EMEA retailers[20] - Criteo's Retail Media same-retailer Contribution ex-TAC retention was +112%[28] Financial Position and Outlook - Revenue was $483 million[25] - Free Cash Flow was $(36) million[25] - The company projects a full-year 2025 Contribution ex-TAC growth of +3% to +4% at constant currency[35] - Adjusted EBITDA is expected to be 33% to 34% of Contribution ex-TAC[35]

[Criteo Q2 2025 Earnings Release](index=1&type=section&id=Criteo%20Q2%202025%20Earnings%20Release) [Financial & Operating Highlights](index=1&type=section&id=Financial%20%26%20Operating%20Highlights) Criteo's Q2 2025 results show strong growth in Contribution ex-TAC and Gross Profit, alongside strategic platform expansion and share repurchases, despite profitability declines Q2 2025 Financial Highlights (YoY) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $483M | $471M | +2% | | Gross Profit | $259M | $233M | +11% | | Net Income | $23M | $28M | -18% | | Contribution ex-TAC | $292M | $267M | +9% | | Adjusted EBITDA | $89M | $93M | -4% | | Adjusted Diluted EPS | $0.92 | $1.08 | -15% | | Free Cash Flow (FCF) | $(36)M | $(4)M | -823% | - The company deployed **$104 million** for share repurchases in the first half of 2025, signaling confidence in its business strategy[1](index=1&type=chunk)[4](index=4&type=chunk)[9](index=9&type=chunk) - Retail Media Contribution ex-TAC grew **11% YoY** at constant currency, with a strong same-retailer retention rate of **112%**[3](index=3&type=chunk) - Performance Media Contribution ex-TAC increased by **6% YoY** at constant currency[4](index=4&type=chunk) - Key operational achievements include launching Auction-Based Display technology, integrating with Mirakl Ads, and signing a global Commerce Media partnership with dentsu[4](index=4&type=chunk) [Detailed Financial Performance](index=5&type=section&id=Detailed%20Financial%20Performance) Criteo's Q2 2025 revenue grew 2% with Contribution ex-TAC up 9%, driven by Retail and Performance Media, though profitability declined due to growth investments, resulting in negative operating cash flow [Revenue, Gross Profit and Contribution ex-TAC](index=5&type=section&id=Revenue%2C%20Gross%20Profit%20and%20Contribution%20ex-TAC) Q2 2025 revenue increased 2% to $483 million, with Gross Profit up 11% to $259 million and Contribution ex-TAC growing 9% to $292 million Q2 2025 Revenue & Profitability Metrics | Metric | Q2 2025 ($M) | Q2 2024 ($M) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $483M | $471M | +2% | | Gross Profit | $259M | $233M | +11% | | Gross Profit Margin | 54% | 49% | +5 ppt | | Contribution ex-TAC | $292M | $267M | +9% | [Profitability and Earnings](index=5&type=section&id=Profitability%20and%20Earnings) Q2 2025 net income decreased to $23 million and Adjusted EBITDA declined 4% to $89 million, primarily due to planned growth investments increasing operating expenses Q2 2025 Earnings Metrics | Metric | Q2 2025 ($M) | Q2 2024 ($M) | YoY Change | | :--- | :--- | :--- | :--- | | Net Income | $23M | $28M | -18% | | Diluted EPS | $0.39 | $0.46 | -15% | | Adjusted EBITDA | $89M | $93M | -4% | | Adjusted EBITDA Margin | 31% | 35% | -4 ppt | - The decline in Adjusted EBITDA was driven by planned growth investments, including investments in people and marketing events[11](index=11&type=chunk)[12](index=12&type=chunk) [Cash Flow and Liquidity](index=5&type=section&id=Cash%20Flow%20and%20Liquidity) Q2 2025 saw negative cash flow from operating activities at $(1) million and Free Cash Flow at $(36) million, though total financial liquidity remained strong at $746 million Q2 2025 Cash Flow | Metric | Q2 2025 ($M) | Q2 2024 ($M) | | :--- | :--- | :--- | | Cash flow from operating activities | $(1)M | $17M | | Free Cash Flow | $(36)M | $(4)M | - As of June 30, 2025, the company had total financial liquidity of approximately **$746 million**, including cash, marketable securities, and its revolving credit facility[15](index=15&type=chunk) [Segment Performance](index=5&type=section&id=Segment%20Performance) Retail Media Contribution ex-TAC grew 11% and Performance Media 6% at constant currency, driving overall segment growth despite varied revenue performance Q2 2025 Segment Contribution ex-TAC (Constant Currency) | Segment | YoY Growth (Constant Currency, %) | | :--- | :--- | | Retail Media | +11% | | Performance Media | +6% | [2025 Business Outlook](index=7&type=section&id=2025%20Business%20Outlook) Criteo raised its full-year 2025 Contribution ex-TAC growth guidance to 3-4% at constant currency, projecting an Adjusted EBITDA margin of 33-34%, and provided Q3 2025 guidance Full Year 2025 Guidance | Metric | Guidance | | :--- | :--- | | Contribution ex-TAC Growth (Constant Currency) | +3% to +4% | | Adjusted EBITDA Margin | ~33% to 34% | Third Quarter 2025 Guidance | Metric | Guidance Range ($M) | | :--- | :--- | | Contribution ex-TAC | $277M - $283M | | Adjusted EBITDA | $81M - $87M | - The updated full-year guidance for Contribution ex-TAC growth represents an increase from the previous forecast of low-single-digit growth[19](index=19&type=chunk) [Appendix: Financial Statements & Reconciliations](index=12&type=section&id=Appendix%3A%20Financial%20Statements%20%26%20Reconciliations) The appendix provides detailed unaudited financial statements, including the Consolidated Statement of Financial Position, Operations, and Cash Flows, along with non-GAAP reconciliations and segment data Consolidated Statement of Operations (Six Months Ended June 30) | Metric | 2025 ($M) | 2024 ($M) | | :--- | :--- | :--- | | Revenue | $934.1M | $921.4M | | Gross Profit | $495.5M | $450.1M | | Income from Operations | $78.6M | $47.3M | | Net Income | $62.9M | $36.6M | Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | June 30, 2025 ($M) | Dec 31, 2024 ($M) | | :--- | :--- | :--- | | Total Assets | $2,114.1M | $2,266.4M | | Total Liabilities | $986.6M | $1,185.4M | | Total Equity | $1,127.5M | $1,081.1M | | Cash and cash equivalents | $205.7M | $290.7M | Consolidated Statement of Cash Flows (Six Months Ended June 30) | Metric | 2025 ($M) | 2024 ($M) | | :--- | :--- | :--- | | Net cash from operating activities | $60.9M | $31.2M | | Net cash used in investing activities | $(41.7)M | $(35.2)M | | Net cash used in financing activities | $(103.1)M | $(102.1)M |