Criteo S.A.(CRTO) - 2021 Q1 - Quarterly Report

PART I FINANCIAL INFORMATION Item 1 Unaudited Financial Statements Presents Criteo S.A.'s unaudited condensed consolidated financial statements as of March 31, 2021, prepared under U.S. GAAP Condensed Consolidated Statements of Financial Position (Unaudited) Total assets decreased to $1,782,635 thousand as of March 31, 2021, with liabilities and equity also reduced | Metric | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | | :--------------- | :---------------------------- | :------------------------------- | | Total Assets | $1,782,635 | $1,853,410 | | Total Liabilities| $638,872 | $700,723 | | Total Equity | $1,143,763 | $1,152,687 | Condensed Consolidated Statements of Income (Unaudited) Revenue increased to $541,077 thousand for Q1 2021, with net income rising to $23,450 thousand and higher EPS | Metric | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | | :--------------- | :----------------------------------------------- | :----------------------------------------------- | | Revenue | $541,077 | $503,376 | | Net Income | $23,450 | $16,428 | | Basic EPS | $0.37 | $0.25 | | Diluted EPS | $0.35 | $0.25 | Condensed Consolidated Statements of Comprehensive Income (Unaudited) Total comprehensive loss of $(12,904) thousand for Q1 2021, primarily due to foreign currency translation differences | Metric | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | | :-------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Net income | $23,450 | $16,428 | | Foreign currency translation differences| $(36,983) | $(15,932) | | Total comprehensive income (loss) | $(12,904) | $2,230 | Condensed Consolidated Statements of Shareholder's Equity (Unaudited) Equity attributable to shareholders decreased to $1,109,626 thousand as of March 31, 2021, reflecting net income, comprehensive loss, and share repurchases | Metric | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | | :----------------------------------------- | :---------------------------- | :------------------------------- | | Equity-attributable to shareholders of Criteo S.A. | $1,109,626 | $1,117,142 | | Total equity | $1,143,763 | $1,152,687 | - On February 5, 2021, Criteo's Board of Directors authorized a share repurchase program of up to $100.0 million of the Company's outstanding American Depositary Shares[25] Condensed Consolidated Statements of Cash Flows (Unaudited) Net cash from operating activities significantly increased to $77,362 thousand for Q1 2021, with shifts in investing and financing cash flows | Metric | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | | :----------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Cash from operating activities | $77,362 | $56,743 | | Cash used for investing activities | $(17,032) | $(10,848) | | Cash used for financing activities | $(3,416) | $(18,761) | | Net increase in cash and cash equivalents | $32,049 | $17,743 | Notes to Condensed Consolidated Financial Statements (Unaudited) These notes provide detailed disclosures on the company's financial position, performance, and cash flows, prepared in accordance with U.S. GAAP Note 1. Summary of Significant Accounting Policies Unaudited condensed consolidated financial statements adhere to U.S. GAAP, with estimates in revenue recognition and credit losses, and a new net revenue policy for Retail Media - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP, requiring estimates and judgments in areas such as revenue recognition, credit losses, and income taxes[36][37] - For the Retail Media Platform, a new self-service solution, revenue is now reported on a net basis as the company acts as an agent[39] - ASU 2019-12 (Income Taxes) and ASU 2018-14 (Retirement Benefits) were adopted effective January 1, 2021, with no material impact on consolidated financial statements[40][42] Note 2. Significant Events and Transactions of the Period A workforce restructuring plan was announced on February 1, 2021, resulting in $5.2 million in severance charges for Q1 2021 - A workforce restructuring plan was announced on February 1, 2021, to better align with the company's evolution, with completion expected by the end of 2021[45] | Metric | Amount (in thousands) | | :---------------------- | :-------------------- | | Restructuring costs | $5,152 | | Restructuring liability - March 31, 2021 | $5,578 | Note 3. Financial Instruments Financial assets totaled $569,751 thousand and liabilities $510,029 thousand as of March 31, 2021, with cash and marketable securities increasing | Metric | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | | :----------------------- | :---------------------------- | :------------------------------- | | Total Financial Assets | $569,751 | $625,365 | | Total Financial Liabilities | $510,029 | $547,453 | | Cash and cash equivalents | $520,060 | $488,011 | | Marketable Securities | $45,867 | $41,809 | - Derivative financial instruments, primarily foreign currency forward contracts, are used to hedge exposure to exchange rate fluctuations and are considered Level 2 financial instruments[50][51] Note 4. Trade Receivables Net trade receivables decreased to $416,910 thousand as of March 31, 2021, with a slight reduction in the allowance for credit losses | Metric | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------------------------- | :---------------------------- | :------------------------------- | | Trade accounts receivables | $455,604 | $513,954 | | (Less) Allowance for credit losses | $(38,694) | $(39,899) | | Net book value at end of period | $416,910 | $474,055 | | Metric | 2021 (in thousands) | 2020 (in thousands) | | :-------------------------------------- | :------------------ | :------------------ | | Balance at January 1 | $(39,899) | $(16,068) | | Allowance for credit losses | $(2,759) | $(6,997) | | Reversal of provision | $3,306 | $2,989 | | Balance at March 31 | $(38,694) | $(23,084) | Note 5. Other Current Assets Other current assets increased to $22,494 thousand as of March 31, 2021, primarily due to higher prepaid expenses for SaaS and office rentals | Metric | March 31, 2021 (in thousands) | December 31, 202