PresentationPeter KeithMD & Senior Research Analyst Okay. Thank you very much, everyone. Thanks for your patience. Welcome to our retail media discussion with Walmart at the Piper Sandler Growth Frontiers Conference. My name is Peter Keith. I'm the senior research analyst covering consumer hardlines and broadlines and I'm joined by my colleague and friend, Tom Champion. He's a senior research analyst covering Internet companies in the technology space. Quick introductions for who we have on stage. I think t ...

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].

Financial Data and Key Metrics Changes - The company is focusing on driving revenue, improving profitability, and creating a winning culture as key priorities [12][13] - The company aims to transform its operations in 2025 and expand in 2026, with a focus on increasing demand and pricing [19][78] Business Line Data and Key Metrics Changes - The restructuring of the sales organization includes two Chief Revenue Officers (CROs) focusing on enterprise and commercial sides of the business [14][15] - The company is centralizing key functions to enhance focus on demand and supply sides [17] Market Data and Key Metrics Changes - The out-of-home media share of media spend has decreased from 6% to 2.5% over seven years, indicating a significant market challenge [27] - The company is targeting significant urban markets such as New York, Miami, Chicago, and San Francisco for its premium brand positioning [65] Company Strategy and Development Direction - The company is focusing on experiential brand experiences, retail media, and the creator economy as key areas for growth [20][21][59] - The strategy includes enhancing digital capabilities and leveraging AI to improve brand trust and engagement [32][21] Management's Comments on Operating Environment and Future Outlook - Management believes that the biggest opportunity lies in reestablishing the relevance of out-of-home media in the marketing mix [30] - The company is committed to improving profitability by exiting unprofitable leases and focusing on high-quality inventory [88][91] Other Important Information - The company is not currently pursuing large M&A but remains open to tuck-in opportunities [80] - The focus on the mid-market and SMB segments remains strong, contributing 60% of revenue [34] Q&A Session Summary Question: What will be the focus if the company returns in a year with good news? - The focus will be on demand levels, organic growth, and the quality of inventory, along with fostering a winning culture [121][125] Question: How does transit fit into the company's strategy? - Transit is viewed as an opportunity for brand experiences, and the company is changing its approach to sell transit advertising more effectively [104][115] Question: What are the challenges faced by OUTFRONT Media? - The main challenge is the positioning of outdoor media in the minds of decision-makers, with opportunities to sell more creatively to the right customers [116]

Financial Data and Key Metrics Changes - The company reported a consolidated sales increase of 5% to $3.65 billion for Q2 2025, with comparable sales (comps) also increasing by 5% [16][11] - Gross profit for Q2 was $1.35 billion, representing 37.06% of net sales, an increase of 33 basis points from the previous year [17] - Non-GAAP earnings per diluted share were $4.38, slightly up from $4.37 in the previous year [19] - The company ended Q2 with approximately $1.2 billion in cash and cash equivalents, with no borrowings on its $2 billion unsecured credit facility [19] Business Line Data and Key Metrics Changes - The company opened one additional House of Sport location in Q2 and plans to open 13 more in Q3, marking the highest number of openings in a single quarter [12] - The e-commerce business continues to grow faster than the overall company, driven by a strong product pipeline and app engagement [13][14] Market Data and Key Metrics Changes - The company continues to gain market share from online-only and omni-channel retailers, with a two-year comp stack of 9.5% and a three-year comp stack of 11.5% [16] - The average ticket increased by 4.1%, while transactions rose by 0.9% in Q2 [16] Company Strategy and Development Direction - The company is focused on four strategic pillars: differentiated product assortment, omni-channel athlete experience, teammate experience, and deep engagement with the Dick's brand [10] - The pending acquisition of Foot Locker is expected to create a global leader in the sports retail industry, enhancing partnerships with leading sports brands and expanding the total addressable market [7][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's resilience and the effectiveness of long-term strategies, raising full-year comp sales growth expectations to 2% to 3.5% [21] - The company is navigating a complex macroeconomic environment, including tariff impacts, while maintaining strong consumer demand and sales momentum [38][21] Other Important Information - The company anticipates closing the Foot Locker acquisition on September 8, 2025, and is enthusiastic about the strategic benefits it will bring [7] - The company is investing in digital and in-store initiatives to position itself for long-term growth, with a focus on enhancing the athlete experience [18][21] Q&A Session Summary Question: Update on Foot Locker acquisition and revitalization plans - Management sees a tremendous opportunity with Foot Locker and plans to invest in stores and marketing to turn the business around, with more details expected in the Q3 call [34][33] Question: Impact of tariffs on demand and pricing - Management reported strong performance despite tariff impacts, with surgical price increases and no significant demand slowdown observed [38][36] Question: Consumer behavior and category performance - Management noted broad-based growth across all key segments, with no signs of consumer slowdown, and highlighted the importance of innovation in driving sales [41][42] Question: Gross margin expectations - Management expects gross margin to expand for the full year, driven by product assortment quality and strategic investments, despite balancing various economic factors [73][72] Question: Game Changer performance - Game Changer continues to perform well with 7.4 million unique active users in Q2, and the integration with Dick's Media Network is enhancing personalization and engagement [80][81] Question: Private brands and tariff impacts - Management did not provide specific details on private brand performance but acknowledged ongoing discussions with brand partners regarding pricing strategies in light of tariffs [122]

Core Insights - The Trade Desk, Inc. (TTD) and Amazon.com, Inc. (AMZN) are significant players in the digital advertising ecosystem, with TTD focusing on ad-tech and AMZN leveraging its e-commerce and cloud capabilities to drive advertising revenue [1][2] Group 1: The Trade Desk (TTD) - TTD is positioned to capture growth opportunities in connected TV (CTV) and retail media, with a strong focus on international expansion and innovative platforms like Kokai [3][4] - In Q2 2025, TTD's growth was largely driven by CTV and retail media, with video accounting for a high-40s percentage of its overall business [4] - The Kokai platform has seen over 70% client adoption, enhancing campaign precision and efficiency through integrated AI tools [5][6] - TTD's audience targeting efficiency improved significantly for clients, with Samsung reporting a 43% increase and Cashrewards a 73% improvement in cost per acquisition [6] - TTD faces macroeconomic challenges that could impact advertising budgets, particularly from large global brands, and is experiencing competition from AMZN's expanding DSP business [7] Group 2: Amazon (AMZN) - AMZN's ad services revenue reached $56.2 billion in 2024, with a 22% increase to $15.7 billion in Q2 2025, driven by growth across its advertising portfolio [8][9] - AMZN's advertising capabilities allow access to over 300 million ad-supported audiences across various platforms, contributing significantly to profitability [9] - The company is investing heavily in its DSP and CTV businesses, enhancing its competitive position against TTD [11] - Recent partnerships with Roku and Disney have expanded AMZN's DSP reach, leveraging its diverse business model to reduce reliance on any single segment [12][13] Group 3: Share Performance and Valuation - Over the past month, TTD shares declined by 40.8%, while AMZN shares fell by 2.1%, with both companies trading at high forward P/E valuations [10][14] - TTD's forward 12-month price/earnings ratio is 26.02X, compared to AMZN's 31.39X, indicating differing market perceptions [17] - Analysts have made slight upward revisions for TTD's earnings, while AMZN has seen a more significant upward revision of 6.69% for the current fiscal year [18][20] Group 4: Investment Outlook - AMZN is viewed as a stronger investment pick due to its diversified business model, which includes retail, cloud, AI, and advertising, providing stability and multiple growth avenues compared to TTD's ad-tech focus [22]

Core Viewpoint - The Trade Desk has experienced significant stock decline following its recent earnings report, raising questions about its future prospects in the competitive digital advertising landscape [1][2][13]. Group 1: Recent Performance and Challenges - The Trade Desk's stock fell nearly 39% on August 8, marking its steepest single-day decline after posting quarterly results that disappointed investors [1][4]. - Revenue growth has slowed, with Q2 2025 revenue rising 19% year over year to $694 million, down from previous growth rates. Management has guided for Q3 revenue of at least $717 million, indicating only 14% growth [5][6]. - The company faces challenges in transitioning to its AI platform, Kokai, and is contending with increased competition, particularly from Amazon, which is expanding its advertising business [6][7]. Group 2: Management Changes and Market Sentiment - A significant management change was announced, with longtime CFO Laura Schenkein stepping down, which has unsettled investors and raised concerns about stability during a challenging period [8][9]. - The market's reaction to the management transition reflects investor sensitivity to changes during times of underperformance [8]. Group 3: Long-term Outlook and Opportunities - Despite short-term challenges, The Trade Desk remains the largest independent demand-side platform globally, maintaining its leadership position [10]. - The company's AI engine, Kokai, is gaining adoption, and the overall trend towards AI technology is expected to continue, positioning the company favorably for the future [11]. - The Trade Desk is benefiting from significant secular tailwinds in retail media and connected TV, which are growing faster than the broader advertising market, suggesting potential for multiple players to succeed [11][13]. Group 4: Investor Considerations - The recent stock decline presents a potential opportunity for long-term investors, although caution is advised until there is greater visibility on the company's turnaround efforts [14][15]. - Monitoring the company's progress in addressing its challenges will be crucial for investors considering their next moves [14][16].

Core Insights - The Trade Desk (TTD) stock has dropped 39.8% after Q2 2025 earnings release, despite revenues increasing 19% year-over-year to $694 million, surpassing expectations [1][11] - Connected TV (CTV) remains the fastest-growing channel, supported by partnerships with major media players [1][4] Financial Performance - Adjusted EBITDA for Q2 was $271 million, up from $242 million year-over-year, while adjusted EPS was 41 cents, slightly missing estimates but improving from 39 cents in the previous year [2] - Free cash flow stood at $117 million [2] - For Q3 2025, TTD anticipates revenues of at least $717 million, indicating a 14% year-over-year growth [9] Growth Drivers - Increasing digital spending in CTV and retail media are key growth drivers, with CTV accounting for a high-40s percentage of overall business [4][5] - Over 70% of clients are utilizing the Kokai platform, which has shown significant improvements in ad targeting efficiency [6][11] - International expansion and innovations like OpenPath and Deal Desk are expected to enhance market positioning [7][8] Competitive Landscape - TTD faces intense competition in the ad tech space, particularly from giants like Alphabet and Amazon, which dominate the market with their first-party data [13] - The reliance on CTV for growth poses risks, as increased competition in this segment could impact overall performance [14] Cost and Profitability Concerns - Total operating costs surged 17.8% year-over-year to $577.3 million, raising concerns about profitability if revenue growth does not keep pace [15] - Macroeconomic uncertainty may affect advertising budgets, particularly for large global brands [12] Market Positioning - TTD has underperformed compared to peers, with a 29.5% decline in stock value over the past month [18] - The stock is trading at a premium valuation, with a forward price/sales ratio of 8.23X compared to the industry average of 5.46X [21] Investment Outlook - Despite recent stock declines, strong CTV growth and expanding Kokai adoption support long-term prospects [22] - Investors are advised to retain TTD stock for now, while new investors may consider waiting for a more favorable entry point [23]

Financial Data and Key Metrics Changes - In Q2 2025, GMV reached $4.8 billion, growing 9% year over year in U.S. Dollars and 14% on an FX neutral basis [26] - Subscription revenue was $57.2 million, a 6% increase in U.S. Dollars and an 11% increase on an FX neutral basis compared to Q2 2024 [26][27] - Non-GAAP income from operations increased by 35% to $8.5 million, resulting in a 14% non-GAAP operating margin, a three percentage points year-over-year margin expansion [30][31] - Free cash flow for the quarter was $7.1 million, up from $3 million in the same quarter last year, resulting in a free cash flow margin of 12% [32] Business Line Data and Key Metrics Changes - Subscription revenue growth was impacted by a mix shift in Brazil towards larger customers with lower implied take rates, affecting revenue growth despite maintaining similar margins [27][28] - Gross profit reached $45.3 million, up 15.2% in FX neutral terms, with a gross margin increase of 3.5 percentage points year over year [8][29] - Non-GAAP subscription gross margin reached 80%, up 180 basis points year over year, driven by gains in customer support efficiency through AI automation [28][29] Market Data and Key Metrics Changes - The U.S. and Europe markets are growing twice as fast as the overall company, indicating strong demand in these regions [5] - Argentina experienced a reversal in GMV growth, falling back to double-digit negative territory in Q2 after initial recovery signs in Q1 [40][59] - Brazil's GMV growth remained stable in the low twenties, but there was a mix shift towards larger enterprise customers, impacting revenue conversion [63] Company Strategy and Development Direction - The company is focusing on B2B commerce and retail media as strategic priorities, introducing new features and partnerships to enhance its platform [9][12][13] - The expansion of partnerships, such as with Whirlpool for the KitchenAid website in the U.S., highlights the company's global competitiveness [5][11] - The company aims to capture significant upside in the years ahead through disciplined growth strategies and investments in under-penetrated areas [9][36] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging market environment, particularly in Argentina and Brazil, but expressed confidence in the company's competitive positioning and global expansion strategy [34][36] - The company is targeting FX neutral year-over-year subscription revenue growth of 6% to 9% for 2025, despite a reduction in revenue guidance due to market conditions [34] - Management emphasized the resilience of the business model and the ability to deliver profitable growth even in complex conditions [43][44] Other Important Information - The company repurchased 800,000 shares at an average price of $4.82 per share as part of its capital allocation strategy [32][33] - The company is set to launch the latest edition of Vitex Vision, showcasing its product roadmap and innovation priorities [11][16] Q&A Session Summary Question: Discussion on the decline in guidance for GMV and new subscriptions sold - Management explained that the decline was primarily due to the GMV performance of existing customers in Argentina and a mix shift in Brazil towards larger customers with lower take rates [39][40] Question: Details on increased margin expectations - Management highlighted that margin improvements are driven by gains in AI support automation and a reduction in sales and marketing expenses, which are flat year over year [43][44] Question: Changes in implementation timelines for larger clients - Management confirmed that there were no significant changes in implementation cycles, and the guidance already accounted for the longer cycles associated with larger enterprise deals [50][51] Question: Competitive landscape in Argentina and Brazil - Management noted that the competitive landscape in Argentina remains stable, and they are embedding expectations for consumption deceleration in Brazil into their guidance [60][63] Question: Impact of market volatility on B2B and retail media strategies - Management stated that the current market conditions reinforce the value proposition of B2B and retail media initiatives, with no major structural changes affecting their strategy [70][71]

Core Insights - Magnite partners with REMAX to enhance its commerce media business, focusing on monetizing digital inventory and utilizing first-party home buyer data to connect brands with high-intent home buyers [1][2] Group 1: Partnership and Strategy - REMAX becomes the first real estate franchisor to launch a commerce media network, aiming to revolutionize the intersection of real estate and advertising while capitalizing on the retail media trend [2] - The collaboration will leverage Magnite's curation tools to enhance media supply with REMAX's proprietary homebuyer data, allowing for the creation of premium audience segments based on attributes like income, age, and homebuying stage [2][3] Group 2: Audience Targeting and Efficiency - The partnership enables advertisers to utilize REMAX's data against Magnite's premium inventory, providing precise targeting and streamlined programmatic workflows [2][3] - REMAX audience segments reflect real-time home buyer intent signals, which are crucial for sectors such as mortgage lending, insurance, and financial services, enhancing targeting effectiveness [3] Group 3: Network and Market Reach - The REMAX Media Network, launched in December 2024, encompasses digital and offline activations across the U.S. and Canada, offering a unique platform for advertisers to connect with consumers [4] - The collaboration with Magnite is designed to maximize the value of REMAX's home buyer data, allowing advertisers to reach audiences across various platforms, thereby improving match rates and cost efficiency [4]

Core Viewpoint - Criteo S.A. has raised its full-year 2025 outlook, reflecting confidence in its business strategy and performance, as evidenced by disciplined execution and a solid foundation for future growth [1][9]. Financial Highlights - Revenue for Q2 2025 was $483 million, a 2% increase year-over-year, while gross profit rose 11% to $259 million [8][9]. - Contribution ex-TAC for Q2 2025 increased 9% year-over-year to $292 million [9][10]. - Net income for Q2 2025 was $23 million, down 18% from $28 million in Q2 2024, resulting in diluted EPS of $0.39 [10][11]. - Adjusted EBITDA for Q2 2025 was $89 million, a decrease of 4% year-over-year [11][41]. Operating Highlights - Criteo's media spend was $4.3 billion over the last 12 months, with $1.0 billion in Q2 2025, remaining flat year-over-year at constant currency [7]. - Retail Media Contribution ex-TAC grew 11% year-over-year at constant currency, with same-retailer retention at 112% [7]. - The company expanded its platform to 4,000 brands and launched new technologies, including Auction-Based Display and a global integration with Mirakl Ads [7]. Cash Flow and Financial Position - Cash flow from operating activities was $(1) million in Q2 2025, while Free Cash Flow was $(36) million [13][14]. - As of June 30, 2025, Criteo had $241 million in cash and marketable securities, down from $290 million at the end of 2024 [14][35]. Business Outlook - Criteo expects Contribution ex-TAC to grow by 3% to 4% at constant currency for the full year 2025, an increase from previous low-single-digit growth guidance [15][17].