CRITEO REPORTS STRONG FINANCIAL RESULTS IN SECOND QUARTER 2021
Company Raises Outlook for Fiscal 2021 Revenue ex-TAC and Adjusted EBITDA margin
NEW YORK - August 4, 2021 - Criteo S.A. (NASDAQ: CRTO), the global technology company that provides the world's leading Commerce Media Platform, today announced financial results for the second quarter ended June 30, 2021 that exceeded the Company's quarterly guidance.
Second Quarter 2021 Financial Highlights:
The following table summarizes our consolidated financial results for the three and six months ended June 30, 2021 and 2020:
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
YoY Change
2021
2020
YoY Change
(in millions, except EPS data)
GAAP Results
Revenue
$
551
$
438
26
%
$
1,092
$
941
16
%
Net Income
$
15
$
6
144
%
$
38
$
23
70
%
Diluted EPS
$
0.23
$
0.09
156
%
$
0.58
$
0.34
71
%
Cash from operating activities
$
26
$
33
(21)
%
$
104
$
90
15
%
Net cash position
$
490
$
578
(15)
%
$
490
$
578
(15)
%
Non-GAAP Results1
Revenue ex-TAC
$
220
$
180
22
%
$
434
$
386
12
%
Revenue ex-TAC margin
40
%
41
%
(1)
%
40
%
41
%
(1)
%
Adjusted EBITDA
$
67
$
39
73
%
$
143
$
98
46
%
Adjusted diluted EPS
$
0.63
$
0.27
133
%
$
1.31
$
0.79
66
%
Free Cash Flow (FCF)
$
13
$
15
(11)
%
$
77
$
60
28
%
“We continue to execute on our Commerce Media Platform strategy and are excited to see our vision coming to life,” said Megan Clarken, CEO. “We feel very good about our solid performance and continued momentum.”
Q2 2021 Operating Highlights
•The media spend we activated for marketers and media owners increased 31% year-over-year.
•New solutions grew 50% year-over-year at constant currency2 to 25% of total revenue ex-TAC.
•Retail Media revenue grew 10% and Retail Media Revenue ex-TAC grew 49% year-over-year at constant currency2. Same-retailer revenue ex-TAC3 for Retail Media increased 65% year-over-year.
•Criteo acquired Mabaya, a leading retail media technology company that powers sponsored products and retail media monetization for major ecommerce marketplaces globally.
•We added Best Buy and a large high-end fashion specialty retailer in the U.S to our Retail Media Platform.
•We added over 700 net new clients and closed the quarter with over 21,300 clients.
•Same-client revenue3 increased 22% and same-client revenue ex-TAC2 increased 16% year-over-year at constant currency2.
•We expanded our Product leadership team, with a series of key hires to accelerate Product innovation and Go-to-Market.
•During our successful 2021 Investor Day, we revealed our roadmap for the future of the open internet and unveiled our new Criteo branding to align with our significant transformation executed over the last year, including a new logo, visual identity and brand positioning, "The Future is Wide Open".
1 Revenue excluding Traffic Acquisition Costs, or Revenue ex-TAC, Revenue ex-TAC margin, Adjusted EBITDA, Adjusted EBITDA at constant currency, Adjusted EBITDA margin, Adjusted diluted EPS, Free Cash Flow and growth at constant currency are not measures calculated in accordance with U.S. GAAP.
2 Constant currency measures exclude the impact of foreign currency fluctuations and is computed by applying the 2020 average exchange rates for the relevant period to 2021 figures.
3 Same-client revenue or Revenue ex-TAC is the revenue or Revenue ex-TAC generated by clients that were live with us in a given quarter and still live with us the same quarter in the following year.
1
Financial Summary
Revenue for Q2 2021 was $551 million and Revenue ex-TAC was $220 million. Adjusted EBITDA for the quarter was $67 million, resulting in an adjusted diluted EPS of $0.63. At constant currency, Q2 2021 Revenue increased by 22% and Revenue ex-TAC increased by 18%. Free Cash Flow was $13 million in Q2 2021, growing 28% in the first half 2021 to $77 million, and driving a Free Cash Flow conversion rate of 54% of Adjusted EBITDA in the first half 2021. As of June 30, 2021, we had $553 million in cash and marketable securities on our balance sheet.
Sarah Glickman, Chief Financial Officer, said, "With strong double-digit growth in our new solutions, fast execution on our leading Commerce Media Platform and solid operating margins, we continue to invest in our sustainable and profitable growth."
Revenue and Revenue ex-TAC
Revenue increased by 26% year-over-year in Q2 2021, or 22% at constant currency, to $551 million (Q2 2020: $438 million). Revenue ex-TAC in the quarter increased 22% year-over-year, or 18% at constant currency, to $220 million (Q2 2020: $180 million). Revenue ex-TAC as a percentage of revenue, or Revenue ex-TAC margin, was 40% (Q2 2020: 41%).
•Marketing Solutions revenue grew 28% (or 23% at constant currency) and Marketing Solutions revenue ex-TAC grew 19% (or 15% at constant currency), driven by increased spend from Retail clients, both on our retargeting and audience targeting solutions, offsetting part of the negative impact from continued lower spend from Travel clients.
•Retail Media revenue grew 13% (or 10% at constant currency) and Retail Media revenue ex-TAC increased 53% (or 49% on a constant currency basis), driven by good execution around Prime Day in North America and continued traction in EMEA.
•In the Americas, Revenue increased 19% year-over-year, or 19% at constant currency, to $221 million and represented 40% of total Revenue. Revenue ex-TAC increased 24% year-over-year, or 23% at constant currency, to $87 million and represented 40% of total Revenue ex-TAC.
•In EMEA, Revenue increased 31% year-over-year, or 21% at constant currency, to $209 million and represented 38% of total Revenue. Revenue ex-TAC increased 22% year-over-year, or 13% at constant currency, to $85 million and represented 38% of total Revenue ex-TAC.
•In Asia-Pacific, Revenue increased 31% year-over-year, or 29% at constant currency, to $121 million and represented 22% of total Revenue. Revenue ex-TAC increased 22% year-over-year, or 20% at constant currency, to $49 million and represented 22% of total Revenue ex-TAC.
Net Income and Adjusted Net Income
Net income grew 144% to $15 million in Q2 2021 (Q2 2020: $6 million). Net income margin as a percentage of revenue was 3% (Q2 2020: 1%). In the quarter, we incurred $10 million in restructuring related and transformation costs. Net income available to shareholders of Criteo S.A. was $15 million, or $0.23 per share on a diluted basis (Q2 2020: $6 million, or $0.09 per share on a diluted basis).
Adjusted Net Income, or net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related intangible assets, acquisition-related costs, restructuring related and transformation costs and the tax impact of these adjustments, was $41 million, or $0.63 per share on a diluted basis (Q2 2020: $17 million, or $0.27 per share on a diluted basis).
Adjusted EBITDA and Operating Expenses
Adjusted EBITDA increased 73% year-over-year, or 61% at constant currency, to $67 million (Q2 2020: $39 million), driven by the Revenue ex-TAC performance over the period and effective cost management balanced with growth investments. Adjusted EBITDA as a percentage of Revenue ex-TAC, or Adjusted EBITDA margin, was 31% (Q2 2020: 22%).
Operating expenses increased by 20% or $27 million, to $163 million (Q2 2020: $136 million), mostly driven by investments in our growth areas, including R&D, in a context of disciplined expense management. Operating expenses, excluding the impact of equity awards compensation expense, pension costs, acquisition-related costs, restructuring related and transformation costs, and depreciation and amortization, which we refer to as Non-GAAP Operating Expenses, increased by 9% or $11 million, to $131 million (Q2 2020: $120 million), driven by investments in our growth areas, including R&D, and the impact of our growing stock price on our social charges over the period.
Cash Flow, Cash and Financial Liquidity Position
Cash flow from operating activities decreased 21% year-over-year to $26 million in Q2 2021 (Q2 2020: $33 million) and grew 15% to $104 million in the first half 2021 (H1 2020: $90 million).
2
Free Cash Flow, defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment, decreased 11% to $13 million (Q2 2020: $15 million), but grew 28% in the first half 2021 to $77 million (H1 2020: $60 million), driving a Free Cash Flow conversion rate of 54% of Adjusted EBITDA in the first half 2021 (H1 2020: 61%).
In Q2 2021, we acquired Mabaya, expanding our Commerce Media Platform into the exciting area of online marketplaces. Cash and cash equivalents increased $2 million compared to December 31, 2020 to $490 million, after the Mabaya acquisition and spending $30 million on share repurchases in the second quarter of 2021.
As of June 30, 2021, the Company had total financial liquidity in excess of $1 billion, including its cash position, marketable securities, Revolving Credit Facility and treasury shares reserved for M&A.
Business Outlook
The following forward-looking statements reflect Criteo’s expectations as of August 4, 2021.
Fiscal year 2021 guidance:
•We raise our Revenue ex-TAC growth outlook to between +6% and +8% at constant-currency.
•We raise our expectation of our Adjusted EBITDA margin to approximately 32% of Revenue ex-TAC.
Third quarter 2021 guidance:
•We expect Revenue ex-TAC between $202 million and $205 million, translating into constant-currency growth between +8% and +9% year-over-year.
•We expect Adjusted EBITDA between $47 million and $50 million.
The above guidance for the third quarter and the fiscal year ending December 31, 2021 assumes the following exchange rates for the main currencies impacting our business: a U.S. dollar-euro rate of 0.831, a U.S. dollar-Japanese Yen rate of 108, a U.S. dollar-British pound rate of 0.719, a U.S. dollar-Korean Won rate of 1,112 and a U.S. dollar-Brazilian real rate of 5.36.
The above guidance assumes no acquisitions are completed during the third quarter ending September 30, 2021 and fiscal year ended December 31, 2021.
Reconciliation of Revenue ex-TAC and Adjusted EBITDA guidance to the closest corresponding U.S. GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures; in particular, the measures and effects of equity awards compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our share price. The variability of the above charges could potentially have a significant impact on our future U.S. GAAP financial results.
3
Non-GAAP Financial Measures
This press release and its attachments include the following financial measures defined as non-GAAP financial measures by the U.S. Securities and Exchange Commission ("SEC"): Revenue ex-TAC, Revenue ex-TAC by Region, Revenue ex-TAC by Solution, Revenue ex-TAC margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted diluted EPS, Free Cash Flow and Non-GAAP Operating Expenses. These measures are not calculated in accordance with U.S. GAAP.
Revenue ex-TAC is our revenue excluding Traffic Acquisition Costs ("TAC") generated over the applicable measurement period and Revenue ex-TAC by Region reflects our Revenue ex-TAC by our geographies. Revenue ex-TAC, Revenue ex-TAC by Region, Revenue ex-TAC by Solution, and Revenue ex-TAC margin are key measures used by our management and board of directors to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the elimination of TAC from revenue can provide a useful measure for period-to-period comparisons of our business and across our geographies.
Accordingly, we believe that Revenue ex-TAC, Revenue ex-TAC by Region, Revenue ex-TAC by Solution and Revenue ex-TAC margin provide useful information to investors and the market generally in understanding and evaluating our operating results in the same manner as our management and board of directors.
Adjusted EBITDA is our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity awards compensation expense, pension service costs and restructuring related and transformation costs.
Adjusted EBITDA and Adjusted EBITDA margin are key measures used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, we believe that by eliminating equity awards compensation expense, pension service costs and restructuring related and transformation costs, Adjusted EBITDA and Adjusted EBITDA margin can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.
Adjusted Net Income is our net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related intangible assets, restructuring related and transformation costs and the tax impact of these adjustments. Adjusted Net Income and Adjusted diluted EPS are key measures used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital.
In particular, we believe that by eliminating equity awards compensation expense, amortization of acquisition-related intangible assets, restructuring related and transformation costs and the tax impact of these adjustments, Adjusted Net Income and Adjusted diluted EPS can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted Net Income and Adjusted diluted EPS provide useful information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.
Free Cash Flow is defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment. Free Cash Flow Conversion is defined as free cash flow divided by Adjusted EBITDA. Free Cash Flow and Free Cash Flow Conversion are key measures used by our management and board of directors to evaluate the Company's ability to generate cash. Accordingly, we believe that Free Cash Flow and Free Cash Flow Conversion permit a more complete and comprehensive analysis of our available cash flows.
Non-GAAP Operating Expenses are our consolidated operating expenses adjusted to eliminate the impact of depreciation and amortization, equity awards compensation expense, pension service costs, and restructuring related and transformation costs. The Company uses Non-GAAP Operating Expenses to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short-term and long-term operational plans, and to assess and measure our financial performance and the ability of our operations to generate cash. We believe Non-GAAP Operating Expenses reflects our ongoing operating expenses in a manner that allows for meaningful period-to-period comparisons and analysis of trends in our business. As a result, we believe that Non-GAAP Operating Expenses provides useful information to investors in understanding and evaluating our core operating performance and trends in the same manner as our management and in comparing financial results across periods. In addition, Non-GAAP Operating Expenses is a key component in calculating Adjusted EBITDA, which is one of the key measures the Company uses to provide its quarterly and annual business outlook to the investment community.
4
Please refer to the supplemental financial tables provided in the appendix of this press release for a reconciliation of Revenue ex-TAC to revenue, Revenue ex-TAC by Region to revenue by region, Revenue ex-TAC by Solution to revenue by solution, Adjusted EBITDA to net income, Adjusted Net Income to net income, Free Cash Flow to cash flow from operating activities, and Non-GAAP Operating Expenses to operating expenses, in each case, the most comparable U.S. GAAP measure. Our use of non-GAAP financial measures has limitations as an analytical tool, and you should not consider such non-GAAP measures in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: 1) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; and 2) other companies may report Revenue ex-TAC, Revenue ex-TAC by Region, Revenue ex-TAC by Solution, Adjusted EBITDA, Adjusted Net Income, Free Cash Flow, Non-GAAP Operating Expenses or similarly titled measures but calculate them differently or over different regions, which reduces their usefulness as comparative measures. Because of these and other limitations, you should consider these measures alongside our U.S. GAAP financial results, including revenue and net income.
Forward-Looking Statements Disclosure
This press release contains forward-looking statements, including projected financial results for the quarter ending June 30, 2021 and the year ended December 31, 2021, our expectations regarding our market opportunity and future growth prospects and other statements that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to: failure related to our technology and our ability to innovate and respond to changes in technology, uncertainty regarding the scope and impact of the COVID-19 pandemic on our employees, operations, revenue and cash flows, uncertainty regarding our ability to access a consistent supply of internet display advertising inventory and expand access to such inventory, including without limitation uncertainty regarding the timing and scope of proposed changes to and enhancements of the Chrome browser announced by Google, investments in new business opportunities and the timing of these investments, whether the projected benefits of acquisitions materialize as expected, uncertainty regarding international growth and expansion, the impact of competition, uncertainty regarding legislative, regulatory or self-regulatory developments regarding data privacy matters and the impact of efforts by other participants in our industry to comply therewith, the impact of consumer resistance to the collection and sharing of data, our ability to access data through third parties, failure to enhance our brand cost-effectively, recent growth rates not being indicative of future growth, our ability to manage growth, potential fluctuations in operating results, our ability to grow our base of clients, and the financial impact of maximizing Revenue ex-TAC, as well as risks related to future opportunities and plans, including the uncertainty of expected future financial performance and results and those risks detailed from time-to-time under the caption "Risk Factors" and elsewhere in the Company’s SEC filings and reports, including the Company's Annual Report on Form 10-K filed with the SEC on February 26, 2021, and in subsequent Quarterly Reports on Form 10-Q as well as future filings and reports by the Company. Importantly, at this time, the COVID-19 pandemic continues to have a significant impact on Criteo's business, financial condition, cash flow and results of operations. There are significant uncertainties about the duration and the extent of the impact of the COVID-19 virus.
Except as required by law, the Company undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events, changes in expectations or otherwise.
5
Conference Call Information
Criteo’s senior management team will discuss the Company’s earnings on a call that will take place today, August 4, 2021, at 8:00 AM ET, 2:00 PM CET. The conference call will be webcast live on https://www.webcaster4.com/Webcast/Page/1274/42221 and will be available for replay on the Company's website http://ir.criteo.com.
Please ask to be joined into the "Criteo S.A." call.
About Criteo
Criteo (NASDAQ: CRTO) is the global technology company that provides the world's leading Commerce Media Platform. 2,500 Criteo team members partner with over 21,000 marketers and thousands of media owners around the globe to activate the world's largest set of commerce data to drive better commerce outcomes. By powering trusted and impactful advertising, Criteo brings richer experiences to every consumer while supporting a fair and open internet that enables discovery, innovation and choice. For more information, please visit www.criteo.com.
Contacts
Criteo Investor Relations
Edouard Lassalle, SVP, Market Relations & Capital Markets, e.lassalle@criteo.com
Jessica Meyers, Director, Public Relations, Americas, j.meyers@criteo.com
Financial information to follow
6
CRITEO S.A.
Consolidated Statement of Financial Position
(U.S. dollars in thousands, unaudited)
June 30, 2021
December 31, 2020
Assets
Current assets:
Cash and cash equivalents
$
489,521
$
488,011
Trade receivables, net of allowances of $42.6 million and $39.9 million at June 30, 2021 and December 31, 2020, respectively
438,703
474,055
Income taxes
13,055
11,092
Other taxes
71,866
69,987
Other current assets
21,841
21,405
Marketable Securities - current portion
53,471
—
Total current assets
1,088,457
1,064,550
Property, plant and equipment, net
161,971
189,505
Intangible assets, net
88,558
79,744
Goodwill
332,295
325,805
Right of Use Asset - operating lease
130,104
114,012
Marketable securities - non current portion
10,000
41,809
Non-current financial assets
14,766
18,109
Deferred tax assets
16,291
19,876
Total non-current assets
753,985
788,860
Total assets
$
1,842,442
$
1,853,410
Liabilities and shareholders' equity
Current liabilities:
Trade payables
$
341,047
$
367,025
Contingencies
1,945
2,250
Income taxes
3,105
2,626
Financial liabilities - current portion
3,219
2,889
Lease liability - operating - current portion
37,243
48,388
Other taxes
54,697
58,491
Employee - related payables
74,491
85,272
Other current liabilities
40,988
33,390
Total current liabilities
556,735
600,331
Deferred tax liabilities
4,176
5,297
Defined benefit plans
6,014
6,167
Financial liabilities - non-current portion
375
386
Lease liability - operating - non-current portion
103,888
83,007
Other non-current liabilities
13,185
5,535
Total non-current liabilities
127,638
100,392
Total liabilities
684,373
700,723
Commitments and contingencies
Shareholders' equity:
Common shares, €0.025 par value, 66,697,360 and 66,272,106 shares authorized, issued and outstanding at June 30, 2021 and December 31, 2020, respectively.
2,173
2,161
Treasury stock, 6,080,008 and 5,632,536 shares at cost as of June 30, 2021 and December 31, 2020, respectively.
(111,823)
(85,570)
Additional paid-in capital
720,762
693,164
Accumulated other comprehensive income (loss)
(7,438)
16,028
Retained earnings
519,893
491,359
Equity - attributable to shareholders of Criteo S.A.
1,123,567
1,117,142
Non-controlling interests
34,502
35,545
Total equity
1,158,069
1,152,687
Total equity and liabilities
$
1,842,442
$
1,853,410
7
CRITEO S.A. Consolidated Statement of Income (U.S. dollars in thousands, except share and per share data, unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
YoY Change
2021
2020
YoY Change
Revenue
$
551,311
$
437,614
26
%
$
1,092,388
$
940,990
16
%
Cost of revenue
Traffic acquisition cost
(331,078)
(257,698)
28
%
(658,745)
(555,062)
19
%
Other cost of revenue
(37,364)
(33,914)
10
%
(72,076)
(67,720)
6
%
Gross profit
182,869
146,002
25
%
361,567
318,208
14
%
Operating expenses:
Research and development expenses
(41,915)
(31,247)
34
%
(73,612)
(68,762)
7
%
Sales and operations expenses
(80,751)
(75,781)
7
%
(160,105)
(160,755)
(0.4)
%
General and administrative expenses
(40,474)
(29,185)
39
%
(73,902)
(55,100)
34
%
Total Operating expenses
(163,140)
(136,213)
20
%
(307,619)
(284,617)
8
%
Income from operations
19,729
9,789
102
%
53,948
33,591
61
%
Financial expense
(519)
(1,003)
(48)
%
(1,237)
(1,337)
(7)
%
Income before taxes
19,210
8,786
119
%
52,711
32,254
63
%
Provision for income taxes
(4,181)
(2,636)
59
%
(14,232)
(9,676)
47
%
Net Income
$
15,029
$
6,150
144
%
$
38,479
$
22,578
70
%
Net income available to shareholders of Criteo S.A.
$
14,804
$
5,716
159
%
$
37,210
$
21,175
76
%
Net income available to non-controlling interests
$
225
$
434
(48)
%
$
1,269
$
1,403
(10)
%
Weighted average shares outstanding used in computing per share amounts:
Basic
60,663,301
61,415,467
60,702,780
61,553,875
Diluted
64,665,212
61,790,135
64,371,603
61,958,499
Net income allocated to shareholders per share:
Basic
$
0.24
$
0.09
167
%
$
0.61
$
0.34
79
%
Diluted
$
0.23
$
0.09
156
%
$
0.58
$
0.34
71
%
8
CRITEO S.A.
Consolidated Statement of Cash Flows
(U.S. dollars in thousands, unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
YoY Change
2021
2020
YoY Change
Net income
$
15,029
$
6,150
144
%
$
38,479
$
22,578
70
%
Non-cash and non-operating items
35,888
33,083
8
%
65,905
65,911
—
%
- Amortization and provisions
25,161
27,907
(10)
%
42,386
54,951
(23)
%
- Equity awards compensation expense (1)
11,670
7,160
63
%
18,885
15,662
21
%
- Net gain or (loss) on disposal of non-current assets
14
(123)
NM
3,959
2,143
85
%
- Change in deferred taxes
(2,693)
(4,939)
(45)
%
2,305
(7,617)
NM
- Change in income taxes
1,724
3,056
(44)
%
(1,655)
727
NM
- Other
12
22
(45)
%
25
45
(44)
%
Changes in working capital related to operating activities
(24,557)
(5,856)
NM
(662)
1,631
NM
- (Increase) / Decrease in trade receivables
(21,031)
27,318
NM
26,195
126,706
(79)
%
- Increase / (Decrease) in trade payables
(9,266)
(22,118)
(58)
%
(19,906)
(103,797)
(81)
%
- (Increase) / Decrease in other current assets
(137)
15,448
NM
(5,187)
5,050
NM
- Increase / (Decrease) in other current liabilities
3,458
(25,503)
NM
(1,069)
(26,448)
(96)
%
- Change in operating lease liabilities and right of use assets
2,419
(1,001)
NM
(695)
120
NM
CASH FROM OPERATING ACTIVITIES
26,360
33,377
(21)
%
103,722
90,120
15
%
Acquisition of intangible assets, property, plant and equipment
(15,663)
(29,471)
(47)
%
(27,616)
(40,729)
(32)
%
Change in accounts payable related to intangible assets, property, plant and equipment
2,535
10,939
(77)
%
708
10,460
(93)
%
Payment for businesses, net of cash acquired
(9,598)
—
NM
(9,598)
—
NM
Change in other non-current financial assets
(17,056)
(21,238)
(20)
%
(20,308)
(20,349)
(0.2)
%
CASH USED FOR INVESTING ACTIVITIES
(39,782)
(39,770)
—
%
(56,814)
(50,618)
12
%
Proceeds from borrowings under line-of-credit agreement
—
154,310
NM
—
154,310
NM
Repayment of borrowings
(1,090)
1
NM
(1,272)
(169)
NM
Proceeds from exercise of stock options
7,501
(20)
NM
9,575
(16)
NM
Repurchase of treasury stocks
(29,999)
(14,860)
NM
(34,929)
(33,101)
6
%
Change in other financial liabilities
(370)
(573)
(35)
%
(748)
(927)
(19)
%
CASH (USED FOR) FROM FINANCING ACTIVITIES
(23,958)
138,858
NM
(27,374)
120,097
NM
Effect of exchange rates changes on cash and cash equivalents
6,841
9,210
(26)
%
(18,024)
(181)
NM
Net increase (decrease) in cash and cash equivalents
(30,539)
141,675
NM
1,510
159,418
(99)
%
Net cash and cash equivalents at beginning of period
520,060
436,506
19
%
488,011
418,763
17
%
Net cash and cash equivalents at end of period
$
489,521
$
578,181
(15)
%
$
489,521
$
578,181
(15)
%
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for taxes, net of refunds
$
(5,150)
$
(4,519)
14
%
$
(13,582)
$
(16,566)
(18)
%
Cash paid for interest
$
(369)
$
(317)
16
%
$
(736)
$
(666)
11
%
(1) Share-based compensation expense according to ASC 718 Compensation - stock compensation accounted for $11.2 million and $6.8 million of equity awards compensation expense for the quarter ended June 30, 2021 and 2020, respectively, and $18.0 million and $14.9 million of equity awards compensation for the six months ended June, 30, 2021 and 2020, respectively.
9
CRITEO S.A.
Reconciliation of Cash from Operating Activities to Free Cash Flow
(U.S. dollars in thousands, unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
YoY Change
2021
2020
YoY Change
CASH FROM OPERATING ACTIVITIES
$
26,360
$
33,377
(21)
%
$
103,722
$
90,120
15
%
Acquisition of intangible assets, property, plant and equipment
(15,663)
(29,471)
(47)
%
(27,616)
(40,729)
(32)
%
Change in accounts payable related to intangible assets, property, plant and equipment
2,535
10,939
(77)
%
708
10,460
(93)
%
FREE CASH FLOW (1)
$
13,232
$
14,845
(11)
%
$
76,814
$
59,851
28
%
(1) Free Cash Flow is defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment.
10
CRITEO S.A.
Reconciliation of Revenue ex-TAC to Revenue
(U.S. dollars in thousands, unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
Region
2021
2020
YoY Change
YoY Change at Constant Currency
2021
2020
YoY Change
YoY Change at Constant Currency
Revenue
Americas
$
221,227
$
185,674
19
%
19
%
$
425,127
$
377,419
13
%
13
%
EMEA
209,303
159,621
31
%
21
%
421,399
349,735
20
%
12
%
Asia-Pacific
120,781
92,319
31
%
29
%
245,862
213,836
15
%
12
%
Total
551,311
437,614
26
%
22
%
1,092,388
940,990
16
%
12
%
Traffic acquisition costs (1)
Americas
(134,332)
(115,317)
16
%
16
%
(261,960)
(235,339)
11
%
12
%
EMEA
(124,747)
(90,153)
38
%
27
%
(251,395)
(198,550)
27
%
17
%
Asia-Pacific
(71,999)
(52,228)
38
%
36
%
(145,390)
(121,173)
20
%
17
%
Total
(331,078)
(257,698)
28
%
24
%
(658,745)
(555,062)
19
%
15
%
Revenue ex-TAC (1)
Americas
86,895
70,357
24
%
23
%
163,167
142,080
15
%
15
%
EMEA
84,556
69,468
22
%
12
%
170,004
151,185
12
%
4
%
Asia-Pacific
48,782
40,091
22
%
20
%
100,472
92,663
8
%
6
%
Total
$
220,233
$
179,916
22
%
18
%
$
433,643
$
385,928
12
%
9
%
Three Months Ended
Six Months Ended
June 30,
June 30,
Solution
2021
2020
YoY Change
YoY Change at Constant Currency
2021
2020
YoY Change
YoY Change at Constant Currency
Revenue
Marketing Solutions
$
487,465
$
381,270
28
%
23
%
$
970,655
$
851,043
14
%
10
%
Retail Media (2)
63,846
56,344
13
%
10
%
121,733
89,947
35
%
32
%
Total
551,311
437,614
26
%
22
%
1,092,388
940,990
16
%
12
%
Traffic acquisition costs (1)
Marketing Solutions
(294,132)
(218,990)
34
%
30
%
(585,005)
(492,047)
19
%
15
%
Retail Media (2)
(36,946)
(38,708)
(5)
%
(7)
%
(73,740)
(63,015)
17
%
14
%
Total
(331,078)
(257,698)
28
%
24
%
(658,745)
(555,062)
19
%
15
%
Revenue ex-TAC (1)
Marketing Solutions
193,333
162,280
19
%
15
%
385,650
358,996
7
%
4
%
Retail Media (2)
26,900
17,636
53
%
49
%
47,993
26,932
78
%
74
%
Total
$
220,233
$
179,916
22
%
18
%
$
433,643
$
385,928
12
%
9
%
(1) We define Revenue ex-TAC as our revenue excluding traffic acquisition costs generated over the applicable measurement period. Revenue ex-TAC, Traffic Acquisition Costs, Revenue ex-TAC by Region and Revenue ex-TAC by Solution are not measures calculated in accordance with U.S. GAAP. We have included Revenue ex-TAC, Traffic Acquisition Costs, Revenue ex-TAC by Region and Revenue ex-TAC by Solution because they are key measures used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the elimination of TAC from revenue and review of these measures by region and solution can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Revenue ex-TAC, Traffic Acquisition Costs, Revenue ex-TAC by Region, and Revenue ex-TAC by Solution provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Revenue ex-TAC, Traffic Acquisition Costs, Revenue ex-TAC by Region and Revenue ex-TAC by Solution has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; (b) other companies may report Revenue, Traffic Acquisition Costs, Revenue ex-TAC by Region and Revenue ex-TAC by Solution, or similarly titled measures but define the regions, and product families differently, which reduces their effectiveness as a comparative measure; and (c) other companies may report Revenue ex-TAC or similarly titled measures but calculate them differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Revenue ex-TAC and Revenue, Traffic Acquisition Costs, Revenue ex-TAC by Region and Revenue ex-TAC by Solution alongside our other U.S. GAAP financial results, including revenue. The above tables provide a reconciliation of Revenue ex-TAC to revenue, Revenue ex-TAC by Region to revenue by region and Revenue ex-TAC by Solution to revenue by solution.
(2) Criteo operates as one operating segment. From January 1, 2021 we have disaggregated revenues between Marketing Solutions and Retail Media. A strategic building block of Criteo’s Commerce Media Platform, the Retail Media Platform, introduced in June 2020, is a self-service solution providing transparency, measurement and control to brands and retailers. In all arrangements running on this platform, Criteo recognizes revenue on a net basis, whereas revenue from arrangements running on legacy Retail Media solutions are accounted for on a gross basis. Over time, we expect most clients using Criteo’s legacy Retail Media solutions to transition to this platform. As new clients onboard and existing clients transition to the Retail Media Platform, Revenue may decline but Revenue ex-TAC margin will increase. Revenue ex-TAC will not be impacted by this transition.
11
CRITEO S.A.
Reconciliation of Adjusted EBITDA to Net Income
(U.S. dollars in thousands, unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
YoY Change
2021
2020
YoY Change
Net income
$
15,029
$
6,150
144
%
$
38,479
$
22,578
70
%
Adjustments:
Financial expense
519
1,003
(48)
%
1,237
1,337
(7)
%
Provision for income taxes
4,181
2,636
59
%
14,232
9,676
47
%
Equity awards compensation expense
11,669
7,159
63
%
19,551
15,662
25
%
Research and development
4,218
2,068
NM
6,714
4,438
51
%
Sales and operations
3,636
1,572
NM
6,005
5,190
16
%
General and administrative
3,815
3,519
8
%
6,832
6,034
13
%
Pension service costs
337
539
(37)
%
675
1,077
(37)
%
Research and development
175
269
(35)
%
350
538
(35)
%
Sales and operations
53
95
(44)
%
106
190
(44)
%
General and administrative
109
175
(38)
%
219
349
(37)
%
Depreciation and amortization expense
22,491
20,208
11
%
44,345
44,346
—
%
Cost of revenue
15,744
13,098
20
%
30,988
25,869
20
%
Research and development (1)
2,207
1,658
33
%
3,960
7,308
(46)
%
Sales and operations
3,702
4,221
(12)
%
7,656
8,561
(11)
%
General and administrative
838
1,231
(32)
%
1,741
2,608
(33)
%
Acquisition-related costs
3,047
—
NM
3,047
—
NM
General and administrative
3,047
—
NM
3,047
—
NM
Restructuring related and transformation costs (2)
9,996
1,216
NM
21,632
3,425
NM
Research and development
4,831
513
NM
6,267
1,508
NM
Sales and operations
1,551
415
NM
8,918
1,436
NM
General and administrative
3,614
288
NM
6,447
481
NM
Total net adjustments
52,240
32,761
59
%
104,719
75,523
39
%
Adjusted EBITDA (3)
$
67,269
$
38,911
73
%
$
143,198
$
98,101
46
%
(1) For the Six Months Ended June 30, 2020, the Company recognized an accelerated amortization expense for Manage technology due to a revised useful life in 2020 ($4.0 million in Research and development).
(2) For the Three Months and the Six Months Ended June 2021, and June 2020, respectively, the Company recognized restructuring related and transformation costs following its new organizational structure implemented to support its Commerce Media Platform strategy:
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
2021
2020
(Gain) from forfeitures of share-based compensation awards
—
—
(666)
—
Facilities related costs
9,721
807
16,337
1,794
Payroll related costs
(181)
409
4,971
1,631
Consulting costs related to transformation
456
—
990
—
Total restructuring related and transformation costs
$
9,996
$
1,216
$
21,632
$
3,425
For the three months ended June 30, 2021 and June 30, 2020, respectively, the cash outflows related to restructuring related and transformation costs were $10.3 million, and $2.1 million respectively, and were mainly comprised of payroll costs, broker and termination penalties related to real-estate facilities and other consulting fees.
(3) We define Adjusted EBITDA as our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity awards compensation expense, pension service costs, acquisition-related costs and restructuring related and transformation costs. Adjusted EBITDA is not a measure calculated in accordance with U.S. GAAP. We have included Adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short-term and long-term operational plans. In particular, we believe that the elimination of equity awards compensation expense, pension service costs, and restructuring related and transformation costs in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; (b) Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (c) Adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation; (d) Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and (e) other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Adjusted EBITDA alongside our U.S. GAAP financial results, including net income.
12
CRITEO S.A.
Reconciliation from Non-GAAP Operating Expenses to Operating Expenses under GAAP
(U.S. dollars in thousands, unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
YoY Change
2021
2020
YoY Change
Research and Development expenses
$
(41,915)
$
(31,247)
34
%
$
(73,612)
$
(68,762)
7
%
Equity awards compensation expense
4,218
2,068
NM
6,714
4,438
51
%
Depreciation and Amortization expense
2,207
1,658
33
%
3,960
7,308
(46)
%
Pension service costs
175
269
(35)
%
350
538
(35)
%
Restructuring related and transformation costs
4,831
513
NM
6,267
1,508
NM
Non GAAP - Research and Development expenses
(30,484)
(26,739)
14
%
(56,321)
(54,970)
2
%
Sales and Operations expenses
(80,751)
(75,781)
7
%
(160,105)
(160,755)
(0.4)
%
Equity awards compensation expense
3,636
1,572
NM
6,005
5,190
16
%
Depreciation and Amortization expense
3,702
4,221
(12)
%
7,656
8,561
(11)
%
Pension service costs
53
95
(44)
%
106
190
(44)
%
Restructuring related and transformation costs
1,551
415
NM
8,918
1,436
NM
Non GAAP - Sales and Operations expenses
(71,809)
(69,478)
3
%
(137,420)
(145,378)
(5)
%
General and Administrative expenses
(40,474)
(29,185)
39
%
(73,902)
(55,100)
34
%
Equity awards compensation expense
3,815
3,519
8
%
6,832
6,034
13
%
Depreciation and Amortization expense
838
1,231
(32)
%
1,741
2,608
(33)
%
Pension service costs
109
175
(38)
%
219
349
(37)
%
Acquisition-related costs
3,047
—
NM
3,047
—
NM
Restructuring related and transformation costs
3,614
288
NM
6,447
481
NM
Non GAAP - General and Administrative expenses
(29,051)
(23,972)
21
%
(55,616)
(45,628)
22
%
Total Operating expenses
(163,140)
(136,213)
20
%
(307,619)
(284,617)
8
%
Equity awards compensation expense
11,669
7,159
63
%
19,551
15,662
25
%
Depreciation and Amortization expense
6,747
7,110
(5)
%
13,357
18,477
(28)
%
Pension service costs
337
539
(37)
%
675
1,077
(37)
%
Acquisition-related costs
3,047
—
NM
3,047
—
NM
Restructuring related and transformation costs
9,996
1,216
NM
21,632
3,425
NM
Total Non GAAP Operating expenses (1)
$
(131,344)
$
(120,189)
9
%
$
(249,357)
$
(245,976)
1
%
(1) We define Non-GAAP Operating Expenses as our consolidated operating expenses adjusted to eliminate the impact of depreciation and amortization, equity awards compensation expense, pension service costs, acquisition-related costs and restructuring related and transformation costs. The Company uses Non-GAAP Operating Expenses to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short-term and long-term operational plans, and to assess and measure our financial performance and the ability of our operations to generate cash. We believe Non-GAAP Operating Expenses reflects our ongoing operating expenses in a manner that allows for meaningful period-to-period comparisons and analysis of trends in our business. As a result, we believe that Non-GAAP Operating Expenses provides useful information to investors in understanding and evaluating our core operating performance and trends in the same manner as our management and in comparing financial results across periods. In addition, Non-GAAP Operating Expenses is a key component in calculating Adjusted EBITDA, which is one of the key measures we use to provide our quarterly and annual business outlook to the investment community.
13
CRITEO S.A.
Detailed Information on Selected Items
(U.S. dollars in thousands, unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
YoY Change
2021
2020
YoY Change
Equity awards compensation expense
Research and development
$
4,218
$
2,068
NM
$
6,714
$
4,438
51
%
Sales and operations
3,636
1,572
NM
6,005
5,190
16
%
General and administrative
3,815
3,519
8
%
6,832
6,034
13
%
Total equity awards compensation expense
11,669
7,159
63
%
19,551
15,662
25
%
Pension service costs
Research and development
175
269
(35)
%
350
538
(35)
%
Sales and operations
53
95
(44)
%
106
190
(44)
%
General and administrative
109
175
(38)
%
219
349
(37)
%
Total pension service costs
337
539
(37)
%
675
1,077
(37)
%
Depreciation and amortization expense
Cost of revenue
15,744
13,098
20
%
30,988
25,869
20
%
Research and development
2,207
1,658
33
%
3,960
7,308
(46)
%
Sales and operations
3,702
4,221
(12)
%
7,656
8,561
(11)
%
General and administrative
838
1,231
(32)
%
1,741
2,608
(33)
%
Total depreciation and amortization expense
22,491
20,208
11
%
44,345
44,346
—
%
Acquisition-related costs
General and administrative
3,047
—
NM
3,047
—
NM
Total acquisition-related costs
3,047
—
NM
3,047
—
NM
Restructuring related and transformation costs
Research and development
4,831
513
NM
6,267
1,508
NM
Sales and operations
1,551
415
NM
8,918
1,436
NM
General and administrative
3,614
288
NM
6,447
481
NM
Total restructuring related and transformation costs
$
9,996
$
1,216
NM
$
21,632
$
3,425
NM
14
CRITEO S.A.
Reconciliation of Adjusted Net Income to Net Income
(U.S. dollars in thousands except share and per share data, unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
YoY Change
2021
2020
YoY Change
Net income
$
15,029
$
6,150
144
%
$
38,479
$
22,578
70
%
Adjustments:
Equity awards compensation expense
11,669
7,159
63
%
19,551
15,662
25
%
Amortization of acquisition-related intangible assets (1)
2,936
2,847
3
%
5,871
9,695
(39)
%
Acquisition-related costs
3,047
—
NM
3,047
—
NM
Restructuring related and transformation costs
9,996
1,216
NM
21,632
3,425
NM
Tax impact of the above adjustments
(1,821)
(665)
NM
(4,572)
(2,625)
74
%
Total net adjustments
25,827
10,557
NM
45,529
26,157
74
%
Adjusted net income (2)
$
40,856
$
16,707
145
%
$
84,008
$
48,735
72
%
Weighted average shares outstanding
- Basic
60,663,301
61,415,467
60,702,780
61,553,875
- Diluted
64,665,212
61,790,135
64,371,603
61,958,499
Adjusted net income per share
- Basic
$
0.67
$
0.27
148
%
$
1.38
$
0.79
75
%
- Diluted
$
0.63
$
0.27
133
%
$
1.31
$
0.79
66
%
(1) For the Six Months Ended June 30, 2020, the Company recognized an accelerated amortization expense for Manage technology due to a revised useful life in 2019 ($4.0 million in Research and development).
(2) We define Adjusted Net Income as our net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related intangible assets, acquisition-related costs, restructuring related and transformation costs, and the tax impact of the foregoing adjustments. Adjusted Net Income is not a measure calculated in accordance with U.S. GAAP. We have included Adjusted Net Income because it is a key measure used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the elimination of equity awards compensation expense, amortization of acquisition-related intangible assets, restructuring related and transformation costs and the tax impact of the foregoing adjustments in calculating Adjusted Net Income can provide a useful measure for period-to-period comparisons of our business. Accordingly, we believe that Adjusted Net Income provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Adjusted Net Income has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) Adjusted Net Income does not reflect the potentially dilutive impact of equity-based compensation or the impact of certain acquisition-related costs; and (b) other companies, including companies in our industry, may calculate Adjusted Net Income or similarly titled measures differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Adjusted Net Income alongside our other U.S. GAAP-based financial results, including net income.
15
CRITEO S.A.
Constant Currency Reconciliation
(U.S. dollars in thousands, unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
YoY Change
2021
2020
YoY Change
Revenue as reported
$
551,311
$
437,614
26
%
$
1,092,388
$
940,990
16
%
Conversion impact U.S. dollar/other currencies
(18,569)
(35,316)
Revenue at constant currency(1)
532,742
437,614
22
%
1,057,072
940,990
12
%
Traffic acquisition costs as reported
(331,078)
(257,698)
28
%
(658,745)
(555,062)
19
%
Conversion impact U.S. dollar/other currencies
11,283
21,600
Traffic Acquisition Costs at constant currency(1)
(319,795)
(257,698)
24
%
(637,145)
(555,062)
15
%
Revenue ex-TAC as reported(2)
220,233
179,916
22
%
433,643
385,928
12
%
Conversion impact U.S. dollar/other currencies
(7,285)
(13,715)
Revenue ex-TAC at constant currency(2)
212,948
179,916
18
%
419,928
385,928
9
%
Revenue ex-TAC(2)/Revenue as reported
40
%
41
%
40
%
41
%
Other cost of revenue as reported
(37,364)
(33,914)
10
%
(72,076)
(67,720)
6
%
Conversion impact U.S. dollar/other currencies
559
881
Other cost of revenue at constant currency(1)
(36,805)
(33,914)
9
%
(71,195)
(67,720)
5
%
Adjusted EBITDA(3)
67,269
38,911
73
%
143,198
98,101
46
%
Conversion impact U.S. dollar/other currencies
(4,433)
(9,024)
Adjusted EBITDA(3) at constant currency(1)
$
62,836
$
38,911
61
%
$
134,174
$
98,101
37
%
Adjusted EBITDA(3)/Revenue ex-TAC(2)
31
%
22
%
33
%
25
%
(1) Information herein with respect to results presented on a constant currency basis is computed by applying prior period average exchange rates to current period results. We have included results on a constant currency basis because it is a key measure used by our management and board of directors to evaluate operating performance. Management reviews and analyzes business results excluding the effect of foreign currency translation because they believe this better represents our underlying business trends. The table above reconciles the actual results presented in this section with the results presented on a constant currency basis.
(2) Revenue ex-TAC is not a measure calculated in accordance with U.S. GAAP. See the table entitled "Reconciliation of Revenue ex-TAC to Revenue" for a reconciliation of Revenue Ex-TAC to revenue.
(3) Adjusted EBITDA is not a measure calculated in accordance with U.S. GAAP. See the table entitled "Reconciliation of Adjusted EBITDA to Net Income" for a reconciliation of Adjusted EBITDA to net income.
16
CRITEO S.A.
Information on Share Count
(unaudited)
Six Months Ended
2021
2020
Shares outstanding as at January 1,
60,639,570
62,293,508
Weighted average number of shares issued during the period
Shares outstanding as of June 30, after Treasury stocks
60,617,352
60,615,473
Total dilutive effect of share options, warrants, employee warrants
8,438,680
8,341,925
Fully diluted shares as at June 30,
69,056,032
68,957,398
17
CRITEO S.A.
Supplemental Financial Information and Operating Metrics
(U.S. dollars in thousands except where stated, unaudited)
YoY Change
QoQ Change
Q2 2021
Q1 2021
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
Q3 2019
Q2 2019
Clients
5%
3%
21,332
20,626
21,460
20,565
20,359
20,360
20,247
19,971
19,733
Revenue
26%
2%
551,311
541,077
661,282
470,345
437,614
503,376
652,640
522,606
528,147
Americas
19%
8%
221,227
203,900
312,817
204,618
185,674
191,745
306,250
213,937
213,974
EMEA
31%
(1)%
209,303
212,096
232,137
167,800
159,621
190,114
216,639
185,556
194,359
APAC
31%
(3)%
120,781
125,081
116,328
97,927
92,319
121,517
129,751
123,113
119,814
Revenue
26%
2%
551,311
541,077
661,282
470,345
437,614
503,376
N.A
N.A
N.A
Marketing Solutions
28%
1%
487,465
483,190
543,262
412,126
381,270
469,773
N.A
N.A
N.A
Retail Media
13%
10%
63,846
57,887
118,020
58,219
56,344
33,603
N.A
N.A
N.A
TAC
28%
1%
(331,078)
(327,667)
(408,108)
(284,401)
(257,698)
(297,364)
(386,388)
(301,901)
(304,229)
Americas
16%
5%
(134,332)
(127,628)
(203,341)
(130,756)
(115,317)
(120,022)
(189,092)
(129,047)
(129,491)
EMEA
38%
(2)%
(124,747)
(126,648)
(137,384)
(97,272)
(90,153)
(108,397)
(124,939)
(103,899)
(107,401)
APAC
38%
(2)%
(71,999)
(73,391)
(67,383)
(56,373)
(52,228)
(68,945)
(72,357)
(68,955)
(67,337)
TAC
28%
1%
(331,078)
(327,667)
(408,108)
(284,401)
(257,698)
(297,364)
N.A
N.A
N.A
Marketing Solutions
34%
1%
(294,132)
(290,873)
(324,017)
(243,616)
(218,990)
(273,057)
N.A
N.A
N.A
Retail Media
(5)%
—%
(36,946)
(36,794)
(84,091)
(40,785)
(38,708)
(24,307)
N.A
N.A
N.A
Revenue ex-TAC (1)
22%
3%
220,233
213,410
253,174
185,944
179,916
206,012
266,252
220,705
223,918
Americas
24%
14%
86,895
76,272
109,476
73,862
70,357
71,723
117,158
84,890
84,483
EMEA
22%
(1)%
84,556
85,448
94,753
70,528
69,468
81,717
91,700
81,657
86,958
APAC
22%
(6)%
48,782
51,690
48,945
41,554
40,091
52,572
57,394
54,158
52,477
Revenue ex-TAC (1)
22%
3%
220,233
213,410
253,174
185,944
179,916
206,012
N.A
N.A
N.A
Marketing Solutions
19%
1%
193,333
192,317
219,245
168,510
162,280
196,716
N.A
N.A
N.A
Retail Media
53%
28%
26,900
21,093
33,929
17,434
17,636
9,296
N.A
N.A
N.A
Cash flow from operating activities
(21)%
(66)%
26,360
77,362
44,080
51,156
33,377
56,743
59,359
43,289
52,964
Capital expenditures
(29)%
(5)%
13,128
13,780
22,302
12,898
18,532
11,737
17,520
23,944
32,792
Capital expenditures/Revenue
N.A
N.A
2%
3%
3%
3%
4%
2%
3%
5%
6%
Net cash position
(15)%
(6)%
489,521
520,060
488,011
626,744
578,181
436,506
418,763
409,178
422,053
Headcount
(4)%
2%
2,572
2,532
2,594
2,636
2,685
2,701
2,755
2,794
2,873
Days Sales Outstanding (days - end of month)
N.A
N.A
66
64
56
62
61
62
52
57
58
(1) We define Revenue ex-TAC as our revenue excluding traffic acquisition costs generated over the applicable measurement period. Revenue ex-TAC, Traffic Acquisition Costs, Revenue ex-TAC by Region and Revenue ex-TAC by Solution are not measures calculated in accordance with U.S. GAAP. We have included Revenue ex-TAC, Traffic Acquisition Costs, Revenue ex-TAC by Region and Revenue ex-TAC by Solution because they are key measures used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the elimination of TAC from revenue and review of these measures by region and solution can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Revenue ex-TAC, Traffic Acquisition Costs, Revenue ex-TAC by Region, and Revenue ex-TAC by Solution provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Revenue ex-TAC, Traffic Acquisition Costs, Revenue ex-TAC by Region and Revenue ex-TAC by Solution has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; (b) other companies may report Revenue, Traffic Acquisition Costs, Revenue ex-TAC by Region and Revenue ex-TAC by Solution, or similarly titled measures but define the regions, and product families differently, which reduces their effectiveness as a comparative measure; and (c) other companies may report Revenue ex-TAC or similarly titled measures but calculate them differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Revenue ex-TAC and Revenue, Traffic Acquisition Costs, Revenue ex-TAC by Region and Revenue ex-TAC by Solution alongside our other U.S. GAAP financial results, including revenue. The above tables provide a reconciliation of Revenue ex-TAC to revenue, Revenue ex-TAC by Region to revenue by region and Revenue ex-TAC by Solution to revenue by solution.