Criteo S.A.(US:CRTO)2021-02-10 16:52Financial Data and Key Metrics Changes - Revenue grew 1% in Q4 to $661 million and was $2.1 billion in 2020, representing an 8% decline for the year [48] - Non-GAAP revenue ex-TAC was $253 million in Q4 and $825 million for 2020, or $25 million above expectations, with a 6% decline at constant currency versus Q4 2019 and a 13% decline for the year [49] - Q4 adjusted EBITDA was $103 million, resulting in a 41% margin, translating into $251 million for the year [49] - Free cash flow of $120 million represented a 48% conversion of adjusted EBITDA in 2020, the highest level since 2014 [49][63] Business Line Data and Key Metrics Changes - New solutions grew 38% in Q4 to 24% of total business, with Retail Media growing at 41% [54][55] - Retail Media already works with over 50% of the U.S. top 25 e-commerce retailers and over 50% of the top-20 European commerce retailers [27] - Revenue ex-TAC from new products represented about $150 million, close to 20% of the business, and grew close to 50% in 2020 [26] Market Data and Key Metrics Changes - The company processed about $900 billion a year in online sales, which is larger than Amazon [80] - The e-commerce landscape is predicted to grow to nearly $7 trillion by 2023, with the Open Internet accounting for about 38% of that total [80] Company Strategy and Development Direction - The company aims to transform into a Commerce Media Platform, focusing on e-commerce and leveraging first-party data [29][74] - The strategy includes expanding Retail Media and new solutions, targeting around 50% growth in 2021 [67] - The company is focused on strengthening its core business while exploring strategic game changers and driving tech and operational excellence [56][58] Management's Comments on Operating Environment and Future Outlook - Management expects low to mid-single-digit growth in revenue ex-TAC at constant currency for fiscal 2021, with an adjusted EBITDA margin above 30% [66] - The company anticipates incremental Identity and Privacy impacts of about $60 million in 2021 relative to the 2020 run rate [67] - Management is optimistic about the growth of new solutions and the overall e-commerce momentum [68] Other Important Information - The company closed 2020 with $530 million in cash and marketable securities, maintaining flexibility for capital allocation [64] - A new share buyback program of up to $100 million has been authorized by the Board [64] Q&A Session Summary Question: When does the company expect Travel spending to recover? - Management indicated that Travel spending is currently down 75% to 80% year-on-year, with hopes for recovery as the year progresses [79] Question: How does the company's Retail Media product differ from Amazon? - The company aims to be the Amazon advertising on the Open Internet, focusing on first-party data and a broader e-commerce scale, processing more online sales than Amazon [80][81] Question: What is the role of CTV in the company's revenue mix? - CTV is viewed as another channel, with a focus on e-commerce advertising, and while it currently does not carry much advertising, the company is preparing for future opportunities [85]