Criteo S.A.(US:CRTO)2023-08-02 17:24Financial Data and Key Metrics Changes - The company reported revenue of $469 million and Contribution ex-TAC of $240 million for Q2 2023, reflecting a year-over-year growth of 13% at constant currency, following a 7% growth in Q2 2022 [29][30] - The net loss for Q2 2023 was $2 million, with a diluted net loss per share of $0.05 and adjusted diluted EPS of $0.49 per share [33][34] - The company expects adjusted EBITDA between $58 million and $62 million for Q3 2023, reflecting dilution from Iponweb [35][36] Business Line Data and Key Metrics Changes - Retail Media revenue was $45 million, with Contribution ex-TAC growing 20% at constant currency to $44 million, and up 62% on a two-year stack basis [51] - Marketing Solutions revenue was $395 million, with Contribution ex-TAC at $168 million, driven by strong growth in Commerce Audiences, which increased by 41% year-over-year [30][52] - Retargeting was down 15% year-over-year, while Commerce Audiences represented close to half of Contribution ex-TAC, up from a third a year ago [16][30] Market Data and Key Metrics Changes - The travel vertical performed well, up 36% in Q2 2023, and 111% on a two-year stack basis [31] - Retail online transactions were lower across all regions in Q2 compared to last year, with specific impacts noted in France due to temporary government measures [30][58] - Retail Media spend driven by agencies grew over 50% in the U.S. during the quarter [42] Company Strategy and Development Direction - The company is focused on transforming into a Commerce Media powerhouse, with the integration of Iponweb and the launch of new platforms like Commerce Max and Commerce Grid [13][14] - The strategy includes leveraging first-party data and AI to enhance advertising effectiveness and client engagement [27][28] - The company aims to capitalize on the growing demand for Commerce Audiences and expand its footprint in adjacent commerce verticals [41][52] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the remainder of the year, anticipating high-single-digit to low-double-digit Contribution ex-TAC growth at constant currency in 2023 [1][2] - The company noted that while Q2 saw lower growth, there were strong signs of recovery in July, with expectations for improved performance in the second half of the year [5][59] - Management highlighted the importance of measurement and standards in Retail Media to drive advertiser confidence and budget allocation [48] Other Important Information - The company has a strong financial position with $747 million in total liquidity and no long-term debt, allowing for significant flexibility in growth and capital allocation strategies [54] - The company expects to generate positive free cash flow in the second half of the year, aligning with seasonal business trends [54][55] - The anticipated normalized tax rate for 2023 is around 25% [34] Q&A Session Summary Question: Insights on Retail Media and lower spend across segments - Management acknowledged lower spend in the retail sector, particularly in France, due to government measures, but noted an acceleration in growth in July [4][58] Question: Future growth expectations for Commerce Audiences - Management expects Contribution ex-TAC growth of 25% to 30% as advertisers shift budgets towards full-funnel activation, with no expected signal loss impact in the second half of the year [62] Question: Impact of in-housing on Retail Media - Management discussed the trend of large retailers in-housing capabilities, emphasizing that Criteo can provide a platform for those who do not wish to manage everything internally [66][78] Question: Updates on the Uber partnership - Management expressed excitement about the relationship with Uber, highlighting its potential to extend beyond retail media into broader commerce opportunities [86][100] Question: Expectations for the Commerce Max launch - Management confirmed a strong pipeline of committed campaign spend for Commerce Max, with expectations for gradual ramp-up post-launch [129][130]