Criteo S.A.(CRTO) - 2025 Q3 - Quarterly Results

Financial Performance - Q3 2025 revenue was $470 million, a 2% increase year-over-year, with gross profit rising 11% to $256 million[3] - Net income surged 552% to $40 million, resulting in diluted EPS of $0.70, compared to $0.11 in Q3 2024[7] - Adjusted EBITDA increased 28% year-over-year to $105 million, with an adjusted EBITDA margin of 36%[8] - Free Cash Flow (FCF) rose 74% to $67 million in Q3 2025, with a trailing 12-month FCF of $222 million[11] - Revenue for Q3 2025 was $469.66 million, a 2% increase from $458.89 million in Q3 2024[41] - Net income for Q3 2025 reached $40.08 million, a significant increase of 552% compared to $6.14 million in Q3 2024[53] - Gross profit for the nine months ended September 30, 2025, was $751.98 million, up from $682.00 million in the same period of 2024, reflecting a growth of 10%[41] - Free cash flow for Q3 2025 was $67.34 million, compared to $38.60 million in Q3 2024, representing a 74% increase[45] - Contribution ex-TAC for Q3 2025 was $288.13 million, an 8% increase from $266.10 million in Q3 2024[48] - Adjusted net income for the three months ended September 30, 2025, increased by 26% year-over-year to $70.304 million, and for the nine months, it rose by 10% to $183.923 million[61] Operating Expenses and Cash Flow - Operating expenses decreased 8% year-over-year to $205 million, reflecting disciplined resource allocation[9] - Total operating expenses decreased to $204.85 million in Q3 2025 from $222.33 million in Q3 2024, a reduction of 8%[41] - Cash flows from operating activities for the nine months ended September 30, 2025, totaled $150.54 million, compared to $88.71 million in the same period of 2024[43] - Cash flow from operating activities improved significantly, reaching $89,600 million, a 56% increase compared to the previous year[71] Balance Sheet and Assets - Cash and cash equivalents, along with marketable securities, totaled $296 million as of September 30, 2025[11] - Total assets decreased from $2,266,449 thousand as of December 31, 2024, to $2,062,286 thousand as of September 30, 2025, representing a decline of approximately 9.0%[39] - Current liabilities decreased from $1,046,600 thousand as of December 31, 2024, to $755,108 thousand as of September 30, 2025, a reduction of about 28.0%[39] - Retained earnings increased from $571,744 thousand as of December 31, 2024, to $661,496 thousand as of September 30, 2025, reflecting a growth of approximately 15.7%[39] - Trade receivables decreased from $800,859 thousand as of December 31, 2024, to $568,733 thousand as of September 30, 2025, a decline of about 29.0%[39] - Cash and cash equivalents decreased from $290,693 thousand as of December 31, 2024, to $255,014 thousand as of September 30, 2025, a decrease of approximately 12.3%[39] - Total liabilities decreased from $1,185,352 thousand as of December 31, 2024, to $891,349 thousand as of September 30, 2025, a reduction of about 25.0%[39] Strategic Initiatives - The company plans to redomicile to Luxembourg and list ordinary shares on Nasdaq, aiming to enhance capital allocation flexibility[13] - The company plans to file a Registration Statement on Form S-4 with the SEC regarding the Conversion, which will include a preliminary proxy statement[30] - The anticipated financial results for the quarter ending December 31, 2025, are subject to various risks and uncertainties, including macro-economic conditions such as inflation and fluctuating interest rates[28] Media and Advertising Performance - Criteo's media spend reached $4.3 billion over the last 12 months, with Q3 2025 media spend at $1.0 billion, up 4% year-over-year[4] - Retail Media Contribution ex-TAC grew 11% year-over-year, while Performance Media Contribution ex-TAC increased 5%[12] - Retail Media revenue grew by 10% year-over-year in Q3 2025, reaching $67.11 million, while Performance Media revenue increased by 1% to $402.55 million[50] - The company has unique access to over $1 trillion in annual commerce sales through its AI-powered advertising platform[36] Employee and Operational Metrics - Headcount increased by 4% year-over-year to 3,650 employees[71] - Days Sales Outstanding decreased by 1 day to 64 days at the end of the month[72] - The company amended the calculation of Days Sales Outstanding to include the Iponweb acquisition, which would have resulted in 71 days for the same period[72] Legal and Compliance - The company recorded a net probable loss of $1.5 million related to a legal settlement during the third quarter of 2025[59]