Q3 2025 Earnings Investor Presentation Safe Harbor Statement This presentation contrains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 2IE of the Securities Exchange Act of 1934, as amended, that are based on our management's beliefs and assumptions and on information currently available to them. All stotements other than present and historical facts and conditions contained in this presentation, including statements regarding our possi ...

Summary of Criteo Conference Call Company Overview - **Company**: Criteo - **Industry**: E-commerce, Digital Marketing, Media Monetization - **CEO**: Michael Komosinski, who joined earlier this year, previously held leadership roles at Dentsu and Merkel [2][3] Key Points and Arguments Competitive Advantages - Criteo is an independent ad tech player, providing value on both supply and demand sides of retail media [9] - The company has an unmatched supply footprint due to its early market entry with the Commerce Yield monetization platform [10] - Criteo's strategy focuses on reaccelerating growth, improving durability, and enhancing performance media execution [12] Growth Strategy - The company aims to identify white space in product segments and develop products rapidly to achieve consistent results [13] - Near-term opportunities include expanding product offerings in performance media and retail media, such as on-site video and native advertising [14][15] - Long-term goals involve advancements in technology for more efficient retail supply purchasing [15] Market Trends - The advertising industry is moving towards AI-driven automated marketing platforms, with Criteo's Commerce Go tool driving significant campaign volume growth [23][24] - The company reported a 45% quarter-on-quarter growth in its Commerce Audience segment [19] - Social media integrations, particularly with Meta, have shown a 40% sequential growth in 1Q [21] Financial Performance - Criteo maintains a 25% adjusted EBITDA margin guide, with a commitment to growth investments despite a lower revenue base [43] - The company is focused on organic growth and opportunistic M&A to accelerate its roadmap [46] Challenges and Risks - There are signs of softer macro trends affecting client spending, particularly in discretionary categories [41] - The company has reduced scope with its largest client, but believes this situation is unique and not likely to spread [38][40] Future Outlook - Criteo sees a $50 billion serviceable available market (SAM) by 2027 in retail media [29] - The company is optimistic about the integration with Microsoft advertising and expects to make announcements regarding this in the near future [33][34] Additional Important Content - The CEO emphasized the importance of execution and reliability in delivering consistent results to investors [12] - Criteo's focus on AI and data assets positions it well for future developments in the agentic shopping experience [27][28] - The company continues to repurchase shares as part of its capital allocation strategy, balancing growth investments with shareholder returns [46][47]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $451 million, with contribution ex TAC increasing to $264 million, reflecting a year-over-year headwind from foreign currencies of $6 million [30] - Adjusted EBITDA for Q1 2025 was $92 million, up 30% year-over-year, driven by operational leverage from top-line growth and cost discipline [34] - Net income for Q1 2025 was $40 million, an increase from $9 million in the previous year, resulting in diluted earnings per share of $0.66 compared to $0.12 last year [35][36] Business Line Data and Key Metrics Changes - Retail media revenue was $59 million, with contribution ex TAC growing 18% at constant currency, driven by strength in on-site and off-site campaigns [31] - Performance media revenue was $392 million, with contribution ex TAC increasing by 4% at constant currency, led by the Commerce Growth Solution [32] - The company activated $335 million in media spend in retail media, up 21% year-over-year, with significant growth in U.S. agency spend [18][19] Market Data and Key Metrics Changes - Double-digit growth in media spend was observed in Asia Pacific, while low single-digit growth occurred in Europe and the Middle East, with lower budgets in the U.S. [33] - Travel was the fastest-growing vertical, up 44%, while retail and fashion saw declines, with fashion down 6% [34] Company Strategy and Development Direction - The company aims to reaccelerate growth and improve durability, fortifying its leadership position in retail media and reenergizing its performance media business [11][12] - Criteo is shifting from a managed service model to a more scalable self-service platform, investing in new formats like outcome-based native display and CTV [17][28] - The company plans to maintain adjusted EBITDA margins in the 33% to 34% range while generating industry-leading cash flows [28][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term prospects of the performance media segment, especially following Google's decision regarding third-party cookies [8][38] - The company anticipates contribution ex TAC to grow low single digits year-over-year at constant currency for 2025, with underlying growth expected to be around 20% excluding two specific clients [39][40] - Management acknowledged near-term challenges but emphasized the resilience of the business and the potential for continued growth and profitability [44] Other Important Information - The company has a strong financial position with $810 million in total liquidity and no long-term debt, allowing for disciplined capital allocation [36] - A share buyback program was initiated, with $56 million deployed for share repurchases in Q1 2025 [37] Q&A Session Summary Question: Impact of retail media client changes - Management noted that the largest retail media client will continue to use their technology but will curtail managed services, resulting in a significant impact on growth rates for retail media [49][51] Question: Macro trends in April - Management observed a soft macro environment in April, with mixed performance across categories, but emphasized resilience in their performance business [55] Question: Spending patterns across income demographics - Management indicated that spending patterns are being monitored, with some discretionary categories seeing less spend across income bands [61] Question: Revenue impact from large client downtick - Management clarified that the impact from the largest retail media client will be significant but is expected to lap within a year, with a focus on maintaining growth across the broader client base [63] Question: CTV and video strategy - Management expressed interest in CTV as a growing segment and is in the early stages of assessing how it fits into their overall strategy [95][96]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $451 million, with contribution ex TAC increasing to $264 million, reflecting a year-over-year headwind from foreign currencies of $6 million [28] - Adjusted EBITDA was $92 million, up 30% year-over-year, driven by operational leverage from top-line growth and cost discipline [31] - Net income for Q1 2025 was $40 million, a significant increase compared to $9 million last year, with diluted earnings per share of $0.66 compared to $0.12 last year [32][33] Business Line Data and Key Metrics Changes - Retail media revenue was $59 million, with contribution ex TAC growing 18% at constant currency, driven by strength in on-site and off-site campaigns [29] - Performance media revenue was $392 million, with contribution ex TAC increasing by 4% at constant currency, led by the Commerce Growth Solution [30] - Retail media activated $335 million in media spend, up 21% year-over-year, with significant growth in U.S. agency spend [17][18] Market Data and Key Metrics Changes - Double-digit growth in media spend was observed in Asia Pacific, while low single-digit growth occurred in Europe and the Middle East, with lower budgets in the U.S. [31] - Travel was the fastest-growing vertical, up 44%, while retail and fashion saw declines of 6% [31] Company Strategy and Development Direction - The company aims to reaccelerate growth and improve durability, fortifying its leadership position in retail media and reenergizing its performance media business [9][10] - A shift from a managed service model to a more scalable self-service platform is underway, with investments in new formats like outcome-based native display and CTV [15][26] - The company plans to maintain a disciplined approach to growth through a build, partner, and buy framework, focusing on maximizing shareholder value [14][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term prospects of the performance media segment, especially following Google's decision regarding third-party cookies [6][35] - The company anticipates a challenging macro environment impacting retail media growth, projecting low to mid-single-digit growth at constant currency for 2025 [36] - Despite near-term challenges, management remains optimistic about the underlying strength of the commerce media platform and expects continued growth and profitability [41][42] Other Important Information - The company has a strong financial position with $810 million in total liquidity and no long-term debt, allowing for disciplined capital allocation [33] - A share buyback program was initiated, with $56 million deployed for share repurchases in Q1 2025 [34] Q&A Session Summary Question: Impact of largest retail partner's changes - Management noted that the largest retail media client will continue to use their technology but will curtail managed services, impacting growth rates for retail media [46][48] Question: Macro trends in April - Management observed a soft macro environment in April, with mixed performance across categories, but emphasized resilience in their performance business [52][53] Question: Spending patterns across income demographics - Management indicated that discretionary categories are seeing less spend across income bands, with a focus on monitoring trends as retailers announce results [57][59] Question: Retail media client revenue impact - The impact from the largest retail media client is significant but is expected to lap within a year, with ongoing growth from other clients [61][62] Question: Self-service tools sophistication - Management acknowledged that Criteo is on a journey to enhance self-service capabilities, with excitement around the rollout of Commerce Go [98]