Criteo S.A.(CRTO) - 2021 Q2 - Quarterly Report

PART I FINANCIAL INFORMATION Item 1 Unaudited Financial Statements This section presents Criteo S.A.'s unaudited condensed consolidated financial statements as of June 30, 2021, covering financial position, income, comprehensive income, equity, and cash flows, with detailed notes Condensed Consolidated Statements of Financial Position (Unaudited) | Metric | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------------------- | :--------------------------- | :----------------------------- | | Total assets | $1,842,442 | $1,853,410 | | Total liabilities | $684,373 | $700,723 | | Total equity | $1,158,069 | $1,152,687 | - Total assets slightly decreased from $1,853.4 million at December 31, 2020, to $1,842.4 million at June 30, 2021, while total liabilities also decreased, and total equity saw a minor increase[14] Condensed Consolidated Statements of Income (Unaudited) | Metric | Three Months Ended June 30, 2021 (in thousands) | Three Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2020 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Revenue | $551,311 | $437,614 | $1,092,388 | $940,990 | | Gross profit | $182,869 | $146,002 | $361,567 | $318,208 | | Income from operations | $19,729 | $9,789 | $53,948 | $33,591 | | Net income | $15,029 | $6,150 | $38,479 | $22,578 | | Basic EPS | $0.24 | $0.09 | $0.61 | $0.34 | | Diluted EPS | $0.23 | $0.09 | $0.58 | $0.34 | - For the three months ended June 30, 2021, revenue increased by 26% YoY to $551.3 million, and net income surged by 144% YoY to $15.0 million, with basic EPS rising from $0.09 to $0.24[17] - For the six months ended June 30, 2021, revenue grew by 16% YoY to $1,092.4 million, and net income increased by 70% YoY to $38.5 million[17] Condensed Consolidated Statements of Comprehensive Income (Unaudited) | Metric | Three Months Ended June 30, 2021 (in thousands) | Three Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2020 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net income | $15,029 | $6,150 | $38,479 | $22,578 | | Other comprehensive income (loss) | $10,472 | $10,227 | $(25,882) | $(3,971) | | Total comprehensive income | $25,501 | $16,377 | $12,597 | $18,607 | - Total comprehensive income for the three months ended June 30, 2021, increased to $25.5 million from $16.4 million in the prior year, driven by higher net income and positive foreign currency translation differences[20] - For the six months ended June 30, 2021, total comprehensive income decreased to $12.6 million from $18.6 million, largely due to significant negative foreign currency translation differences[20] Condensed Consolidated Statements of Shareholder's Equity (Unaudited) | Metric | December 31, 2020 (in thousands) | June 30, 2021 (in thousands) | | :-------------------------------- | :----------------------------- | :--------------------------- | | Common shares | $2,161 | $2,173 | | Treasury stock | $(85,570) | $(111,823) | | Additional paid-in capital | $693,164 | $720,762 | | Accumulated other comprehensive income (loss) | $16,027 | $(7,438) | | Retained earnings | $491,359 | $519,893 | | Equity-attributable to shareholders of Criteo S.A. | $1,117,142 | $1,123,567 | | Non-controlling interests | $35,545 | $34,502 | | Total equity | $1,152,687 | $1,158,069 | - Shareholders' equity attributable to Criteo S.A. increased from $1,117.1 million at December 31, 2020, to $1,123.6 million at June 30, 2021, driven by net income and share-based compensation, partially offset by increased treasury stock and decreased accumulated other comprehensive income[23] Condensed Consolidated Statements of Cash Flows (Unaudited) | Metric | Six Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2020 (in thousands) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | | Net income | $38,479 | $22,578 | | Cash from operating activities | $103,722 | $90,120 | | Cash used for investing activities | $(56,814) | $(50,618) | | Cash (used for) from financing activities | $(27,374) | $120,097 | | Net increase (decrease) in cash and cash equivalents | $1,510 | $159,418 | | Net cash and cash equivalents at end of period | $489,521 | $578,181 | - Net cash from operating activities increased to $103.7 million for the six months ended June 30, 2021, from $90.1 million in the prior year[27] - Cash used for investing activities increased to $56.8 million, primarily due to capital expenditures and marketable securities investments[27] - Cash used for financing activities was $27.4 million, a significant change from $120.1 million generated in the prior year, mainly due to share repurchases[27] Notes to Condensed Consolidated Financial Statements (Unaudited) Note 1. Summary of Significant Accounting Policies - Criteo S.A. is a global technology company focused on enabling marketers and media owners to drive commerce outcomes through its Commerce Media Platform, which activates first-party, privacy-safe data[31][32][33] - The unaudited condensed consolidated financial statements adhere to U.S. GAAP, with certain information condensed or omitted per SEC rules, and rely on key estimates for revenue recognition, credit loss allowances, income taxes, business combinations, and share-based compensation[36][37] - A significant accounting policy update for 2021 involves recognizing revenue for Retail Media Platform transactions on a net basis, as Criteo acts as an agent without controlling advertising inventory or assuming inventory risks[39] Note 2. Significant Events and Transactions of the Period - Criteo announced a workforce restructuring plan on February 1, 2021, expecting completion by year-end 2021, with $5.0 million in severance restructuring charges recorded for the period ended June 30, 2021[45] Restructuring Liability | Metric | Amount (in thousands) | | :-------------------------------- | :-------------------- | | Restructuring liability - January 1, 2021 | $510 | |