Criteo S.A. [CRTO] Filings

10-Q 1 crto-20240630.htm 10-Q crto-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

for the quarterly period ended June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from _________ to _________

Commission file number: 001-36153

Criteo S.A.

(Exact name of registrant as specified in its charter)


France			Not Applicable
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

32 Rue Blanche	Paris	France	75009
(Address of principal executive offices)			(Zip Code)

+33 1 75 85 09 39

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

American Depositary Shares, each representing one Ordinary Share,
nominal value €0.025 per share

CRTO

Nasdaq Global Select Market

Ordinary Shares, nominal value €0.025 per share

Nasdaq Global Select Market

* Not for trading, but only in connection with the registration of the American Depositary Shares.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x

As of July 26, 2024, the registrant had 55,985,114 ordinary shares, nominal value €0.025 per share, outstanding.

TABLE OF CONTENTS


PART I	FINANCIAL INFORMATION	2
Item 1	Unaudited Financial Statements as of June 3 0 , 2024	2
	Condensed Consolidated Statements of Financial Position (Unaudited)	3
	Condensed Consolidated Statements of Income (Unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income (Unaudited)	5
	Condensed Consolidated Statements of Shareholder's Equity (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows (Unaudited)	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4	Controls and Procedures	43
PART II	OTHER INFORMATION	44
Item 1	Legal Proceedings	44
Item 1A	Risk Factors	44
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	58
Item 5	Other Information	58
Item 6	Exhibits	46
Signatures		48

General

Except where the context otherwise requires, all references in this Quarterly Report on Form 10-Q ("Form 10-Q") to the "Company," "Criteo," "we," "us," "our" or similar words or phrases are to Criteo S.A. and its subsidiaries, taken together. In this Form 10-Q, references to "$" and "US$" are to United States dollars. Our unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or "GAAP."

Trademarks

“Criteo,” the Criteo logo and other trademarks or service marks of Criteo appearing in this Form 10-Q are the property of Criteo. Trade names, trademarks and service marks of other companies appearing in this Form 10-Q are the property of their respective holders.

Special Note Regarding Forward-Looking Statements

This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are based on our management’s beliefs and assumptions and on information currently available to our management. All statements other than present and historical facts and conditions contained in this Form 10-Q, including statements regarding our future results of operations and financial position, business strategy, plans and objectives for future operations, are forward-looking statements. When used in this Form 10-Q, the words “anticipate,” “believe,” “can,” “could,” “estimate,” “expect,” “intend,” “is designed to,” “may,” “might,” "objective," “plan,” “potential,” “predict,” "project," "seek," “should,” "will," "would," or the negative of these and similar expressions identify forward-looking statements.

You should refer to Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023, and to our subsequent quarterly reports on Form 10-Q, for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Form 10-Q will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

You should read this Form 10-Q and the documents that we reference in this Form 10-Q and have filed as exhibits to this Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

This Form 10-Q may contain market data and industry forecasts that were obtained from industry publications. These data and forecasts involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such information. We have not independently verified any third-party information. While we believe the market position, market opportunity and market size information included in this Form 10-Q is generally reliable, such information is inherently imprecise.

PART I

Item 1. Financial Statements

CRITEO S.A.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)


	Notes	June 30, 2024		December 31, 2023
		(in thousands)
Assets
Current assets:
Cash and cash equivalents	3	$	216,698	$	336,341
Trade receivables, net of allowances of $38.7 million and $43.3 million at June 30, 2024 and December 31, 2023, respectively.	4	632,749		775,589
Income taxes	12	16,673		2,065
Other taxes		132,465		109,306
Other current assets	5	49,021		48,291
Restricted cash	3	75,000		75,000
Marketable securities - current portion	3	16,480		5,970
Total current assets		1,139,086		1,352,562
Property, plant and equipment, net		115,886		126,494
Intangible assets, net		172,744		180,888
Goodwill		519,924		524,197
Right of use assets - operating lease	7	103,507		112,487

Marketable securities - non-current portion	3	5,353		16,575
Non-current financial assets		5,441		5,294
Other non-current assets	5	59,699		60,742
Deferred tax assets		46,226		52,680
Total non-current assets		1,028,780		1,079,357
Total assets		$	2,167,866	$	2,431,919

Liabilities and shareholders' equity
Current liabilities:
Trade payables		$	635,208	$	838,522
Contingencies - current portion	14	1,373		1,467
Income taxes	12	3,334		17,213
Financial liabilities - current portion	3	7,020		3,389
Lease liability - operating - current portion	7	27,736		35,398
Other taxes		89,322		66,659
Employee - related payables		94,166		113,287
Other current liabilities	6	97,733		104,552
Total current liabilities		955,892		1,180,487
Deferred tax liabilities		3,061		1,083
Defined benefit plans	8	4,231		4,123
Financial liabilities - non-current portion	3	306		77
Lease liability - operating - non-current portion	7	78,801		83,051
Contingencies - non-current portion	14	32,625		32,625
Other non-current liabilities	6	19,760		19,082
Total non-current liabilities		138,784		140,041
Total liabilities		$	1,094,676	$	1,320,528
Commitments and contingencies
Shareholders' equity:
Common shares, €0.025 par value, 59,063,486 and 61,165,663 shares authorized, issued and outstanding at June 30, 2024 and December 31, 2023, respectively.		$	1,967	$	2,023
Treasury stock, 4,461,517 and 5,400,572 shares at cost as of June 30, 2024 and December 31, 2023, respectively.		(154,254)		(161,788)
Additional paid-in capital		761,681		769,240
Accumulated other comprehensive loss		(103,848)		(85,326)
Retained earnings		537,241		555,456
Equity-attributable to shareholders of Criteo S.A.		1,042,787		1,079,605
Non-controlling interests		30,403		31,786
Total equity		1,073,190		1,111,391
Total equity and liabilities		$	2,167,866	$	2,431,919

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

CRITEO S.A.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


			Three Months Ended				Six Months Ended
	Notes		June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
		(in thousands, except per share data)

Revenue	9		$	471,307	$	468,934	$	921,362	$	913,950

Cost of revenue:
Traffic acquisition costs			(204,214)		(228,717)		(400,381)		(453,115)
Other cost of revenue			(34,248)		(40,435)		(70,913)		(79,544)

Gross profit			232,845		199,782		450,068		381,291

Operating expenses:
Research and development expenses			(59,639)		(67,775)		(126,497)		(131,365)
Sales and operations expenses			(95,069)		(112,511)		(187,911)		(213,753)
General and administrative expenses			(41,199)		(18,537)		(88,368)		(58,707)
Total operating expenses			(195,907)		(198,823)		(402,776)		(403,825)
Income (loss) from operations			36,938		959		47,292		(22,534)
Financial and Other income	11		(284)		(1,852)		897		4,975
Income (loss) before taxes			36,654		(893)		48,189		(17,559)
Provision for income tax (expense) benefit	12		(8,595)		(1,078)		(11,564)		3,517
Net Income (loss)			$	28,059	$	(1,971)	$	36,625	$	(14,042)

Net income (loss) available to shareholders of Criteo S.A.			$	26,987	$	(2,876)	$	34,231	$	(14,685)
Net income (loss) available to non-controlling interests			$	1,072	$	905	$	2,394	$	643

Weighted average shares outstanding used in computing per share amounts:
Basic	13		54,684,560		55,924,824		54,915,140		56,094,887
Diluted	13		58,974,186		55,924,824		59,151,582		56,094,887

Net income (loss) allocated to shareholders per share:
Basic	13		$	0.49	$	(0.05)	$	0.62	$	(0.26)
Diluted	13		$	0.46	$	(0.05)	$	0.58	$	(0.26)

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

CRITEO S.A.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS (UNAUDITED)


	Three Months Ended				Six Months Ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
	(in thousands)

Net income (loss)	$	28,059	$	(1,971)	$	36,625	$	(14,042)
Foreign currency translation adjustments, net of taxes	(9,367)		(8,450)		(22,578)		(2,135)
Actuarial gains (losses) on employee benefits, net of taxes	449		(7)		177		(143)
Other comprehensive loss	$	(8,918)	$	(8,457)	$	(22,401)	$	(2,278)
Total comprehensive income (loss)	$	19,141	$	(10,428)	$	14,224	$	(16,320)
Attributable to shareholders of Criteo S.A.	$	19,901	$	(8,763)	$	15,708	$	(14,097)
Attributable to non-controlling interests	$	(760)	$	(1,665)	$	(1,484)	$	(2,223)

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

CRITEO S.A.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)


	Share capital		Treasury Stock		Additional paid-in capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Equity - attributable to shareholders of Criteo S.A.	Non controlling interest	Total equity
	Common shares		Shares
	(in thousands, except share amounts )
Balance at December 31, 2022	63,248,728	$2,079	(5,985,104)	$(174,293)	$734,492	$(91,890)	$577,653	$1,048,041	$33,065	$1,081,106
Net income (loss)	—	—	—	—	—	—	(11,809)	(11,809)	(262)	(12,071)
Other comprehensive income (loss)	—	—	—	—	—	6,475	—	6,475	(296)	6,179
Issuance of ordinary shares	67,968	2	—	—	1,295	—	—	1,297	—	1,297
Change in treasury stocks(*)	—	—	(1,338,049)	(37,107)	—	—	(13,922)	(51,029)	—	(51,029)
Share-Based Compensation	—	—	—	—	24,610	—	—	24,610	97	24,707
Other changes in equity	—	—	—	—	—	—	—	—	—	—
Balance at March 31, 2023	63,316,696	$2,081	(7,323,153)	$(211,400)	$760,397	$(85,415)	$551,922	$1,017,585	$32,604	$1,050,189
Net income (loss)	—	—	—	—	—	—	(2,876)	(2,876)	905	(1,971)
Other comprehensive income (loss)	—	—	—	—	—	(5,887)	—	(5,887)	(2,570)	(8,457)
Issuance of ordinary shares	20,757	—	—	—	399	—	—	399	—	399
Change in treasury stocks(*)	—	—	(89,425)	(2,646)	—	—	(21,189)	(23,835)	—	(23,835)
Share-Based Compensation	—	—	—	—	26,878	—	—	26,878	(165)	26,713
Other changes in equity	—	—	—	—	—	(26)	—	(26)	—	(26)
Balance at June 30, 2023	63,337,453	$2,081	(7,412,578)	$(214,046)	$787,674	$(91,328)	$527,857	$1,012,238	$30,774	$1,043,012

(*) On December 7, 2022, Criteo's board of directors authorized an extension of the share repurchase program to up to $480.0 million of the Company's outstanding American Depositary Shares. The change in treasury stocks is comprised of 2,469,577 shares repurchased at an average price of $31.3 offset by 1,042,103 treasury shares used for RSUs vesting.


	Share capital		Treasury Stock		Additional paid-in capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings	Equity - attributable to shareholders of Criteo S.A.	Non controlling interest	Total equity
	Common shares		Shares
	(in thousands, except share amounts )
Balance at December 31, 2023	61,165,663	$2,023	(5,400,572)	$(161,788)	$769,240	$(85,326)	$555,456	$1,079,605	$31,786	$1,111,391
Net income (loss)	—	—	—	—	—	—	7,244	7,244	1,322	8,566
Other comprehensive income (loss)	—	—	—	—	—	(11,437)	—	(11,437)	(2,046)	(13,483)
Issuance of ordinary shares	15,338	1	—	—	394	—	—	395	—	395
Change in treasury stocks(*)	—	—	(1,216,547)	(42,575)	—	—	(19,568)	(62,143)	—	(62,143)
Share-Based Compensation	—	—	—	—	27,858	—	—	27,858	55	27,913
Other changes in equity	—	—	—	—	—	—	(40)	(40)	—	(40)
Balance at March 31, 2024	61,181,001	$2,024	(6,617,119)	$(204,363)	$797,492	$(96,763)	$543,092	$1,041,482	$31,117	$1,072,599
Net income (loss)	—	—	—	—	—	—	26,987	26,987	1,072	28,059
Other comprehensive income (loss)	—	—	—	—	—	(7,085)	—	(7,085)	(1,833)	(8,918)
Issuance of ordinary shares	32,485	—	—	—	812	—	—	812	—	812
Change in treasury stocks(*)	(2,150,000)	(57)	2,155,602	50,109	(57,871)	—	(32,533)	(40,352)	—	(40,352)
Share-Based Compensation	—	—	—	—	21,248	—	—	21,248	47	21,295
Other changes in equity	—	—	—	—	—	—	(305)	(305)	—	(305)
Balance at June 30, 2024	59,063,486	$1,967	(4,461,517)	$(154,254)	$761,681	$(103,848)	$537,241	$1,042,787	$30,403	$1,073,190

(*) On February 1, 2024, Criteo's board of directors authorized an extension of the share repurchase program to up to $630.0 million of the Company's outstanding American Depositary Shares. The change in treasury stocks is comprised of 3,089,910 shares repurchased at an average price of $33.1 offset by 1,503,965 treasury shares used for RSUs vesting, by 375,000 treasury shares used for LUSs vesting and by 2,150,000 treasury shares cancelled.

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

CRITEO S.A.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


		Six Months Ended
		June 30, 2024		June 30, 2023
	(in thousands)
Net income (loss)		$	36,625	$	(14,042)
Non-cash and non-operating items		82,574		48,886
- Amortization and provisions		46,324		37,422


- Equity awards compensation expense (1)		47,978		52,341
- Net (gain) or loss on disposal of non-current assets		574		(8,797)
- Change in uncertain tax position		1,757		(467)
- Net change in fair value of earn-out		3,187		516
- Change in deferred taxes		8,089		(20,536)
- Change in income taxes		(28,420)		(13,615)

- Other		3,085		2,022
Changes in working capital related to operating activities		(87,995)		8,448
- (Increase) / Decrease in trade receivables		136,520		129,454
- Increase / (Decrease) in trade payables		(193,210)		(128,557)
- (Increase) / Decrease in other current assets		(24,021)		(6,652)
- Increase/ (Decrease) in other current liabilities		(4,472)		14,597
- Change in operating lease liabilities and right of use assets		(2,812)		(394)

Cash from operating activities		31,204		43,292
Acquisition of intangible assets, property, plant and equipment		(36,968)		(61,507)
Change in accounts payable related to intangible assets, property, plant and equipment		2,625		(17,231)
Payment for business, net of cash acquired		(527)		(6,957)
Proceeds from disposition of investments		—		9,625

Change in other non-current financial assets		(287)		(12,267)
Cash used for investing activities		(35,157)		(88,337)


Proceeds from exercise of stock options		1,207		1,697
Repurchase of treasury stocks		(102,495)		(74,866)

Cash payment for contingent consideration		—		(22,025)
Change in other financing activities		(810)		(923)
Cash used for financing activities		(102,098)		(96,117)
Effect of exchange rates changes on cash and cash equivalents		(13,507)		(8,855)
Net decrease in cash and cash equivalents and restricted cash		(119,558)		(150,017)
Net cash and cash equivalents and restricted cash at beginning of period		411,257		448,200
Net cash and cash equivalents and restricted cash at end of period		$	291,698	$	298,183

Supplemental disclosures of cash flow information
Cash paid for taxes, net of refunds		(24,571)		(31,101)
Cash paid for interest		(653)		(676)

(1) Of which $47.1 million and $51.4 million of equity awards compensation expense consisted of share-based compensation expense, net of capitalized stock-based compensation relating to internally developed software according to ASC 718 Compensation - stock compensation for the three months ended June 30, 2024 and 2023, respectively.

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

CRITEO S.A.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Criteo S.A. was initially incorporated as a société par actions simplifiée, or S.A.S., under the laws of the French Republic on November 3, 2005, for a period of 99 years and subsequently converted to a société anonyme, or S.A.

We are a global technology company that enables marketers and media owners to drive better commerce outcomes through the world’s leading Commerce Media Platform. We bring richer experiences to every consumer by supporting a fair and open internet that enables discovery, innovation, and choice — powered by trusted and impactful advertising from the world’s marketers and media owners.

We are leading the way of commerce media — a new approach to advertising that combines commerce data and machine learning to target consumers throughout their shopping journey and help marketers and media owners drive commerce outcomes (sales, leads, advertising revenue).

Our strategy is to help marketers and media owners activate 1st-party, privacy-safe data and drive better commerce outcomes through our Commerce Media Platform, which includes a suite of products:

•that offer marketers (brands, retailers, and agencies) the ability to easily reach consumers anywhere throughout their shopping journey and measure their advertising campaigns

•that offer media owners (publishers and retailers) the ability to monetize their advertising and promotions inventory for commerce anywhere where consumers spend their time

•sitting on top of a dataset and technology that power our entire offering.

In these notes, Criteo S.A. is referred to as the "Parent" company and together with its subsidiaries, collectively, as "Criteo," the "Company," the "Group," or "we".

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements (the "Unaudited Condensed Consolidated Financial Statements") have been prepared by Criteo in accordance with generally accepted accounting principles in the United States of America ("GAAP") and pursuant to the applicable rules and regulations of the Securities and Exchange Commission ("SEC"), including regarding interim financial reporting. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 23, 2024.

The unaudited condensed consolidated financial statements included herein reflect all normal recurring adjustments that are, in the opinion of management, necessary to state fairly the results for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for the fiscal year ending December 31, 2024.

Use of Estimates

The preparation of our Consolidated Financial Statements requires the use of estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amount of revenue and expenses during the period. We base our estimates and assumptions on historical experience and other factors that we believe to be reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates. Estimates in our financial statements include, but are not limited to, (1) gross versus net assessment in revenue recognition (2) income taxes, (3) assumptions used in the valuation of long-lived assets including intangible assets, and goodwill, (4) assumptions surrounding the recognition and valuation of contingent liabilities and losses.

Significant Accounting Policies

Reportable Segments

Beginning with the first quarter of 2024, the Company has changed its segment reporting structure to two reportable segments: Retail Media and Performance Media, which combines our former Marketing Solutions and Iponweb segments, to align with a change in how the Chief Operating Decision Maker (CODM), our Chief Executive Officer (CEO), allocates resources and assesses performance.

As such, prior period segment results and related disclosures have been conformed to reflect the Company’s current reportable segments. This change in accounting policy did not impact our results of operations, financial position, or cash flows. Refer to Note 2 for further discussion.

Goodwill Interim Impairment Evaluation

The Company's goodwill balance was $519.9 million and $524.2 million at June 30, 2024 and December 31, 2023, respectively. We assess goodwill for impairment at least annually during the fourth quarter and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. As noted above, during the first quarter 2024, the Company made a change to its operating and reportable segments from three to two segments: Retail Media and Performance Media. As a result of this change, we reassessed our reporting units for the evaluation of goodwill. Prior to this change, consistent with the determination that we had three operating/reportable segment, we determined that we had three reporting units for goodwill assessment purposes. Our reassessment during the first quarter of 2024 determined that, consistent with the determination that we had two operating/ reportable segments, we also have two reporting units for goodwill assessment purposes: Retail Media and Performance Media.

As a result of this change in reporting units, effective January 1, 2024, we estimated the fair value of our new reporting units and, based on an assessment of the relative fair values of our new reporting units after the change, we determined that the goodwill held by the Iponweb reportable unit was now allocated to the Performance Media reporting unit. This determination was largely based on the fact that the operations of the previous Iponweb operating segment/ reporting unit are significantly integrated with the Performance Media operating segment / reportable unit. The change in reporting units was also considered a triggering event indicating a test for goodwill impairment was required as of January 1, 2024 before and after the change in reporting units. The Company performed those impairment tests, which did not result in the identification of an impairment loss as of January 1, 2024.

Goodwill allocated to the two reportable segments and the changes in the carrying amount for the quarter-ended June 30, 2024 were as follows:


	Retail Media		Performance Media		Total

Balance at January 1, 2024	$	149,680	$	374,517	$	524,197
Acquisitions	—		—		—
Disposals	—		—		—
Currency translation adjustment	(1,044)		(3,229)		(4,273)
Impairments	—		—		—
Balance at June 30, 2024	$	148,636	$	371,288	$	519,924

There have been no other significant changes to our accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Recently Issued Accounting Pronouncements

There have been no recently issued accounting standards adopted during the period which had a material impact on the Company's financial statements.

There are no recently issued accounting standards that are expected to have a material impact on our results of operations, financial condition, or cash flows.

Note 2. Segment information

The Company reports segment information based on the management approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of the Company's reportable segments. Beginning with the first quarter of 2024, the Company changed its segment reporting structure and reports its results of operations through the following two segments: Retail Media and Performance Media.

–Retail Media: This segment encompasses revenue generated from brands, agencies and retailers for the purchase and sale of retail media digital advertising inventory and audiences, and services.

–Performance Media: This segment encompasses commerce activation, monetization, and services.

The Company's CODM allocates resources to and assesses the performance of each segment using information about Contribution excluding Traffic Acquisition Costs (Contribution ex-TAC), which is our segment profitability measure and reflects our gross profit plus other costs of revenue. The Company's CODM does not review any other financial information for our two segments.

The following table shows revenue by reportable segment:


	Three Months Ended				Six Months Ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
	(in thousands)
Retail Media	$	54,777	$	44,590	$	105,649	$	82,611
Performance Media	416,530		424,344		815,713		831,339
Total Revenue	$	471,307	$	468,934	$	921,362	$	913,950

The following table shows Contribution ex-TAC by reportable segment and its reconciliation to the Company’s Consolidated Statements of Operation:


	Three Months Ended				Six Months Ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
	(in thousands)
Contribution ex-TAC
Retail Media	$	53,866	$	43,518	$	104,035	$	80,870
Performance Media	213,227		196,699		416,946		379,965
	$	267,093	$	240,217	$	520,981	$	460,835

Other costs of sales	(34,248)		(40,435)		(70,913)		(79,544)
Gross profit	$	232,845	$	199,782	$	450,068	$	381,291
Operating expenses
Research and development expenses	(59,639)		(67,775)		(126,497)		(131,365)
Sales and operations expenses	(95,069)		(112,511)		(187,911)		(213,753)
General and administrative expenses	(41,199)		(18,537)		(88,368)		(58,707)
Total Operating expenses	$	(195,907)	$	(198,823)	$	(402,776)	$	(403,825)

Income (loss) from operations	$	36,938	$	959	$	47,292	$	(22,534)
Financial and Other Income (Expense)	(284)		(1,852)		897		4,975
Income (loss) before tax	$	36,654	$	(893)	$	48,189	$	(17,559)

Note 3. Financial Instruments

Fair Value Measurements

We classify our cash, cash equivalents and marketable debt securities within Level 1 or Level 2 because we use quoted market prices or pricing models with observable inputs to determine their fair value. Our term deposits are comprised primarily of interest-bearing term deposits and mutual funds. Interest-bearing and term bank deposits are considered Level 2 financial instruments as they are measured using valuation techniques based on observable market data. Term deposits are considered a level 2 financial instrument as they are measured using valuation techniques based on observable market data.


	June 30, 2024				December 31, 2023
	Cash and Cash Equivalent		Marketable Securities		Cash and Cash Equivalent		Marketable Securities
	(in thousands)
Level 1
Cash and cash equivalents	$	177,555	$	—	$	285,518	$	—
Level 2
Term deposits and notes	39,144		21,833		50,823		22,545
Total	$	216,698	$	21,833	$	336,341	$	22,545

The fair value of term deposits approximates their carrying amount given the nature of the investments, its maturities and expected future cash flows.

Marketable Securities

The following table presents for each reporting period, the breakdown of the fair value of marketable securities:


	June 30, 2024		December 31, 2023

	(in thousands)


Securities Held-to-maturity
Term Deposits	21,833		22,545
Total	$	21,833	$	22,545

The gross unrealized gains on our marketable securities were not material as of June 30, 2024.

The following table classifies our marketable debt securities by contractual maturities:


	Held-to-maturity
	June 30, 2024

	(in thousands)
Due in one year	$	16,480
Due in one to five years	5,353
Total	$	21,833

Restricted Cash

As of June 30, 2024, the Company has restricted cash of $75 million in an escrow account containing withdrawal conditions. The cash secures the Company's payment of Iponweb Acquisition contingent consideration to the Sellers, which is conditioned upon the achievement of certain revenue targets by the Iponweb business for the 2023 fiscal year.

Note 4. Trade Receivables

The following table shows the breakdown in trade receivables net book value for the presented periods:


	June 30, 2024		December 31, 2023

	(in thousands)
Trade accounts receivables	$	671,466	$	818,937
(Less) Allowance for credit losses	(38,717)		(43,348)
Net book value at end of period	$	632,749	$	775,589

As of June 30, 2024 no customer individually exceeded 10% of our gross accounts receivables.

Note 5. Other Current and Non-Current Assets

The following table shows the breakdown in other current assets net book value for the presented periods:


	June 30, 2024		December 31, 2023

	(in thousands)
Prepayments to suppliers	$	7,107	$	7,499
Other debtors	11,423		7,279
Prepaid expenses	30,491		32,858
Other current assets	—		655

Net book value at end of period	$	49,021	$	48,291

Prepaid expenses mainly consist of amounts related to SaaS arrangements.

Other non-current assets of $59.7 million are primarily comprised of the indemnification asset of $49.1 million recorded against certain tax liabilities related to the purchase agreement for the Iponweb Acquisition.

Note 6. Other Current and Non-Current Liabilities

Other current liabilities are presented in the following table:


	June 30, 2024		December 31, 2023

	(in thousands)
Customer prepayments	$	7,893	$	25,914
Rebates	24,671		23,315
Accounts payable relating to capital expenditures	5,146		3,346
Other creditors	2,685		2,319
Deferred revenue	2,698		10
Earn out liability – current	54,639		49,647
Total current liabilities	$	97,733	$	104,552

The earn out liability is related to the Iponweb Acquisition, whereas the Sellers are entitled to contingent consideration, which is conditioned upon the achievement of certain revenue targets by the Iponweb business for the 2023 fiscal year. The related earn-out liability is valued and discounted using management's best estimate of the consideration that is expected to be paid during 2024.

Other non-current liabilities are presented in the following table:


	June 30, 2024		December 31, 2023

	(in thousands)

Uncertain tax positions	$	18,109	$	16,785
Other	$	1,651	$	2,297
Total non-current liabilities	$	19,760	$	19,082

The uncertain tax positions are primarily related to the Iponweb Acquisition.

Note 7. Leases

The components of lease expense are as follows:


Three Months Ended	June 30, 2024						June 30, 2023
	Offices		Data Centers		Total		Offices		Data Centers		Total
	(in thousands)
Lease expense	$	3,598	$	6,611	$	10,209	$	3,425	$	5,624	$	9,049
Short term lease expense	314		—		314		147		20		167
Variable lease expense	340		29		369		115		57		172
Sublease income	(387)		—		(387)		(186)		—		(186)
Total operating lease expense	$	3,865	$	6,640	$	10,505	$	3,501	$	5,701	$	9,202


Six Months Ended	June 30, 2024						June 30, 2023
	Offices		Data Centers		Total		Offices		Data Centers		Total
	(in thousands)
Lease expense	$	7,215	$	12,856	$	20,071	$	7,129	$	11,200	$	18,329
Short term lease expense	627		—		627		289		29		318
Variable lease expense	671		57		728		204		61		265
Sublease income	(809)		—		(809)		(415)		—		(415)
Total operating lease expense	$	7,704	$	12,913	$	20,617	$	7,207	$	11,290	$	18,497

Note 8. Employee Benefits

Defined Benefit Plans

According to French law and the Syntec Collective Agreement, French employees are entitled to compensation paid on retirement.

The following table summarizes the changes in the projected benefit obligation:


	Projected benefit obligation
	(in thousands)
Projected benefit obligation present value at January 1, 2023	$	3,708
Service cost	707
Interest cost	161
Curtailment	(306)
Actuarial losses (gains)	(290)
Currency translation adjustment	143
Projected benefit obligation present value at December 31, 2023	$	4,123
Service cost	343
Interest cost	79

Actuarial losses (gains)	(187)
Currency translation adjustment	(127)
Projected benefit obligation present value at June 30, 2024	$	4,231

The Company does not hold any plan assets for any of the periods presented.

The main assumptions used for the purposes of the actuarial valuations are listed below:


	Six Months Ended	Year Ended
	June 30, 2024	December 31, 2023
Discount rate (Corp AA)	4.1%	3.9%
Expected rate of salary increase	7.0%	7.0%
Expected rate of social charges	48.0%	48.0%
Expected staff turnover	Company age-based table	Company age-based table
Estimated retirement age	65 years old	65 years old
Life table	TH-TF 2000-2002 shifted	TH-TF 2000-2002 shifted

Defined Contribution Plans

The total expense represents contributions payable to these plans by us at specified rates.

In some countries, the Group’s employees are eligible for pension payments and similar financial benefits. The Group provides these benefits via defined contribution plans. Under defined contribution plans, the Group has no obligation other than to pay the agreed contributions, with the corresponding expense charged to income for the year. The main contributions relate to France, the United States (for 401k plans), and the United Kingdom.


	Three Months Ended				Six Months Ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
	(in thousands)
Defined contributions plans included in personnel expenses	$	(6,064)	$	(5,536)	$	(10,290)	$	(9,614)

Note 9. Revenue

The following table presents our disaggregated revenues by segment:


Three Months Ended	Retail Media		Performance Media		Total
			(in thousands)
June 30, 2024	$	54,777	$	416,530	$	471,307
June 30, 2023	$	44,590	$	424,344	$	468,934


Six Months Ended	Retail Media		Performance Media		Total
			(in thousands)
June 30, 2024	$	105,649	$	815,713	$	921,362
June 30, 2023	$	82,611	$	831,339	$	913,950

Note 10. Share-Based Compensation

Equity awards Compensation Expense

Equity awards compensation expense recorded in the consolidated statements of operations was as follows:


	Six Months Ended
	June 30, 2024		June 30, 2023
	(in thousands)
Research and Development	$	(23,653)	$	(32,504)
Sales and Operations	(10,087)		(9,092)
General and Administrative	(14,238)		(10,745)
Total equity awards compensation expense (1)	$	(47,978)	$	(52,341)
Tax benefit from equity awards compensation expense	5,101		3,669
Total equity awards compensation expense, net of tax effect	$	(42,877)	$	(48,672)

(1) The six months ended June 30, 2024 are presented net of $2.1 million capitalized stock-based compensation relating to internally developed software.

During the six months ended June 30, 2024, the Company settled $13.1 million of equity instruments granted under share-based arrangements.

The breakdown of the equity award compensation expense by instrument type was as follows:


	Six Months Ended
	June 30, 2024		June 30, 2023
	(in thousands)
Share options	$	—	$	(65)
Lock-up shares	(14,007)		(21,422)
Restricted stock units / Performance stock units	(33,092)		(29,931)
Non-employee warrants	(879)		(923)
Total equity awards compensation expense (1)	$	(47,978)	$	(52,341)
Tax benefit from equity awards compensation expense	5,101		3,669
Total equity awards compensation expense, net of tax effect	$	(42,877)	$	(48,672)

(1) Presented net of $2.1 million capitalized stock-based compensation relating to internally developed software.

A detailed description of each instrument type is provided below.

Share Options

Stock options granted under the Company’s stock incentive plans generally vest over four years, subject to the holder’s continued service through the vesting date and expire no later than 10 years from the date of grant.

In the following tables, exercise prices, grant date share fair values and fair value per equity instruments are provided in euros, as the Company is incorporated in France and the euro is the currency used for the grants.


	Options Outstanding
	Number of Shares Underlying Outstanding Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value

Outstanding as of December 31, 2023	319,238
Options granted	—
Options exercised	(41,123)
Options forfeited	(5,690)
Options canceled	—
Options expired	(5,120)
Outstanding as of June 30, 2024	267,305

Vested and exercisable as of June 30, 2024	267,305	€	19.93	4.39	€	16.14

The aggregate intrinsic value represents the difference between the exercise price of the options and the fair market value of common stock on the date of exercise. No new stock options were granted in the period ending June 30, 2024. As of June 30, 2024, there was no remaining unrecognized stock-based compensation related to unvested stock options.

Lock up shares

On August 1, 2022, 2,960,243 treasury shares were transferred to the Founder (referred to as Lock Up Shares or "LUS"), as partial consideration for the Iponweb Acquisition. These shares are subject to a lock-up period that expires in three installments on each of the first three anniversaries of the Iponweb Acquisition, unless the vesting schedule changes or the Founder's employment agreement is terminated under certain circumstances during the duration of such lock-up period. These shares are considered as equity settled share-based payments under ASC 718 and are accounted over the three-year lock-up period. The share based compensation expense is included in Research and Development expenses on the Consolidated Statement of Income. The shares were valued based on the volume weighted average price of one ADS traded on Nasdaq during the twenty (20) trading days immediately preceding July 28, 2022.


	Shares	Weighted-Average Grant date Fair Value Per Share


Outstanding as of December 31, 2023	1,953,761	—
Granted	—	—
Vested	(375,000)	—
Forfeited	—	—
Outstanding as of June 30, 2024	1,578,761	€	23.94

During the six months ended June 30, 2024, the vesting resulted in the recognition of share-based compensation expense of $5.1 million.

As of June 30, 2024, the Company had unrecognized stock-based compensation relating to restricted stock of approximately $6.8 million, which is expected to be recognized over a period from July 1, 2024 to August 1, 2025.

Restricted Stock Units and Performance Stock Units

During the six months ended June 30, 2024, the Company granted new equity under our current equity compensation plans, which was comprised of restricted stock units (“RSU”), and performance-based RSU awards consisting of total shareholder return (“TSR”) and performance vesting conditions (“PSU”) to the Company’s senior executives.

Restricted Stock Units

Restricted stock units generally vest over four years, subject to the holder’s continued service and/or certain performance conditions through the vesting date. In the following tables, exercise prices, grant date share fair values and fair value per equity instruments are in euros, as the Company is incorporated in France and the euro is the currency used for the grants.


	Shares (RSU)	Weighted-Average Grant date Fair Value Per Share


Outstanding as of December 31, 2023	5,293,263	—
Granted	392,804	—
Vested	(1,342,769)	—
Forfeited	(179,822)	—
Outstanding as of June 30, 2024	4,163,476	€	27.6

The RSUs are subject to a vesting period of four years, over which the expense is recognized on a straight-line basis. A total of 392,804 shares have been granted under this plan, with a weighted-average grant-date fair value of €30.00.

As of June 30, 2024, the Company had unrecognized stock-based compensation relating to restricted stock of approximately $56.4 million, which is expected to be recognized over a weighted-average period of 2.9 years.

Performance Stock Units

Performance stock units are subject to either a performance condition or a market condition.

Awards that are subject to a performance condition, are earned based on internal financial performance metrics measured by Contribution ex-TAC. A total of 536,452 shares have been granted at target under this plan with a vesting period of three years. The target shares are subject to a range of vesting from 0% to 200% based on the performance of internal financial metrics, for a maximum number of shares of 1,072,906. The grant-date fair value is determined based on the fair-value of the shares at the grant date, which is €29.88 per share for a total fair value of approximately $17.4 million, to be expensed on a straight-line basis over the respective vesting period. The number of shares granted, vesting and outstanding subject to performance conditions is as follows:


	Shares (PSU)	Weighted-Average Grant date Fair Value Per Share


Outstanding as of December 31, 2023	660,395	—
Granted	536,452	—
Performance share adjustment	64,152
Vested	(164,764)	—
Forfeited	—	—
Outstanding as of June 30, 2024	1,096,235	€	29.90

As of June 30, 2024, the Company had unrecognized stock-based compensation related to performance stock units of approximately $21.8 million, which is expected to be recognized over a weighted-average period of 3.4 years.

Awards that are subject to a market condition are earned based on the Company’s total shareholder return relative to the Nasdaq Composite Index, and certain other vesting conditions. A total of 268,226 shares have been granted at target under this plan, to be earned in two equal tranches over a term of two and three years, respectively. The target shares are subject to a range of vesting from 0% to 200% for each tranche based on the TSR, for a maximum number of shares of 536,452. The grant-date fair value is approximately $13.7 million, to be expensed on a straight-line basis over the respective vesting period.

The grant-date fair value was determined based on a Monte-Carlo valuation model using the following key assumptions:


Expected volatility of the Company	42.73	%
Expected volatility of the benchmark	71.18	%
Risk-free rate	4.27	%
Expected dividend yield	—	%

The number of shares granted, vested and outstanding subject to market conditions is as follows:


	Shares (TSR)	Weighted-Average Grant date Fair Value Per Share


Outstanding as of December 31, 2023	—	—
Granted	268,226	—
Vested	—	—
Forfeited	—	—
Outstanding as of June 30, 2024	268,226	€	47.42

As of June 30, 2024, a total of $1.9 million expense has been recognized and the Company had unrecognized stock-based compensation related to performance stock units based of market conditions of $11.8 million, which is expected to be recognized over a period from July 1, 2024 to March 1, 2027.

Non-employee warrants

Non-employee warrants generally vest over four years, subject to the holder’s continued service through the vesting date.


	Shares	Weighted-Average Grant date Fair Value Per Share		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value


Outstanding as of December 31, 2023	244,457
Granted	—
Exercised	—
Canceled	—
Expired	—
Outstanding as of June 30, 2024	244,457	€	17.65	3.98	€	18.37

Vested and exercisable - June 30, 2024	244,457

The aggregate intrinsic value represents the difference between the exercise price of the non-employee warrants and the fair market value of common stock on the date of exercise.

No new stock non-employee warrants were granted in the period ending June 30, 2024. As of June 30, 2024 all instruments have fully vested.

Note 11. Financial and Other Income and Expenses

The condensed consolidated statements of income line item “Financial and Other income” can be broken down as follows:


	Three Months Ended				Six Months Ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
	(in thousands)
Financial income from cash equivalents	$	1,640	$	1,072	$	3,829	$	2,135
Interest and fees	(409)		(577)		(832)		(1,063)
Foreign exchange gains (losses)	(1,437)		(1,003)		(559)		(2,952)
Discounting impact	12		(1,419)		(1,766)		(2,099)
Other financial income	(90)		75		225		8,954
Total Financial and Other Income (Expense)	$	(284)	$	(1,852)	$	897	$	4,975

The $0.9 million in financial and other income for the six months ended June 30, 2024, were mainly driven by financial income from cash equivalents, partially offset by a negative impact of foreign exchange loss and the change in the accretion of the earn-out liability related to the Iponweb Acquisition.

As of June 30, 2024, our exposure to foreign currency risk was centralized at Criteo S.A. and hedged using foreign currency swaps or forward purchases or sales of foreign currencies.

Note 12. Income Taxes

The tax provision for interim periods is determined using an estimate of our annual effective tax rate (“AETR”), adjusted for discrete items arising in the period. To calculate our estimated AETR, we estimate our income before taxes and the related tax expense or benefit for the full fiscal year (total of expected current and deferred tax provisions), excluding the effect of significant unusual or infrequently occurring items or comprehensive income items not recognized in the statement of income. Each quarter, we update our estimate of the annual effective tax rate, and if our estimated annual tax rate does change, we make a cumulative adjustment in that quarter. Our quarterly tax provision, and our quarterly estimate of our annual effective tax rate, are subject to significant volatility due to several factors, including our ability to accurately predict our income (loss) before provision for income taxes in multiple jurisdictions. Our effective tax rate in the future will depend on the portion of our profits earned within and outside of France.

In December 2021, the Organization for Economic Cooperation and Development (OECD) released Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of a minimum rate of 15% for multinational companies with consolidated revenue above €750 million. Numerous jurisdictions have enacted or are in the process of enacting legislation to adopt a minimum effective tax rate. While the adoption of Pillar Two did not have a material impact on the first six months of 2024, the Company will continue to assess the ongoing impact as additional guidance becomes available.

The following table presents provision for income taxes:


	Six Months Ended
	June 30, 2024		June 30, 2023
	(in thousands)
Provision for income tax (expense) benefit	$	(11,564)	$	3,517

The $(11.6) million provision for income tax expense for the six months ended June 30, 2024 was driven by profits from operations.

The six months ended June 30, 2024 provision for income taxes mainly differs from the nominal standard French rate of 25.0% due to the application of a reduced income tax rate on the majority of the technology royalties income in France and nondeductible equity awards compensation expense.

Note 13. Earnings Per Share

Basic Earnings Per Share

We calculate basic earnings (loss) per share ("EPS") by dividing the net income or loss for the period attributable to shareholders of the Parent by the weighted average number of shares outstanding.


	Three Months Ended				Six Months Ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Net income (loss) attributable to shareholders of Criteo S.A.	$	26,987	$	(2,876)	$	34,231	$	(14,685)
Weighted average number of shares outstanding	54,684,560		55,924,824		54,915,140		56,094,887
Basic earnings (loss) per share	$	0.49	$	(0.05)	$	0.62	$	(0.26)

Diluted Earnings Per Share

We calculate diluted earnings (loss) per share by dividing the net income or loss attributable to shareholders of the Parent by the weighted average number of shares outstanding plus any potentially dilutive shares not yet issued from share-based compensation plans (refer to Note 10). For the six months ended June 30, 2023, the Company reported a net loss hence basic net loss per share was the same as diluted net loss per share, as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive.

For each period presented, a contract to issue a certain number of shares (i.e., share option, non-employee warrant, employee warrant ("BSPCE")) is assessed as potentially dilutive if it is “in the money” (i.e., the exercise or settlement price is lower than the average market price).


	Three Months Ended				Six Months Ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Net income (loss) attributable to shareholders of Criteo S.A.	$	26,987	$	(2,876)	$	34,231	$	(14,685)
Basic shares :
Weighted average number of shares outstanding of Criteo S.A.	54,684,560		55,924,824		54,915,140		56,094,887
Dilutive effect of :
Restricted share awards ("RSUs")	2,766,726		—		2,880,402		—
Lock-up shares ('LUSs")	1,333,396		—		1,187,404		—
Share options and BSPCE	118,366		—		107,565		—
Share warrants	71,138		—		61,072		—
Diluted shares :
Weighted average number of shares outstanding used to determine diluted earnings per share	58,974,186		55,924,824		59,151,582		56,094,887
Diluted earnings (loss) per share	$	0.46	$	(0.05)	$	0.58	$	(0.26)

The weighted average number of securities that were anti-dilutive for diluted EPS for the periods presented but which could potentially dilute EPS in the future are as follows:


	Six Months Ended
	June 30, 2024	June 30, 2023
Restricted share awards	454,891	248,911
Share options and BSPCE	—	—
Weighted average number of anti-dilutive securities excluded from diluted earnings per share	454,891	248,911

Note 14. Commitments and contingencies

From time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, results of operations, financial condition or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

The amount of the provisions represents management’s latest estimate of the expected impact.

Legal and Regulatory matters

Following a complaint from Privacy International against a number of advertising technology companies with certain data protection authorities, including in France, France's Commission Nationale de l'Informatique et des Libertés (the "CNIL") opened a formal investigation in January 2020 against Criteo. In June 2023, the CNIL issued its decision, which retained alleged European Union's General Data Protection Regulation ("GDPR") violations but reduced the financial sanction against Criteo from the original amount of €60 million ($64.2 million) to €40 million ($42.8 million). Criteo issued the required sanction payment during the third quarter of 2023. The decision relates to past matters and does not include any obligation for Criteo to change its current practices. Criteo has appealed this decision before the French Council of State (Conseil d’Etat).

We are party to a claim (Doe v. GoodRx Holdings, Inc. et al. in the U.S. District Court for the Northern District of California), alleging violations of various state and federal laws. We intend to vigorously defend our position, but we are unable to predict the potential outcome.

Non income tax risks

We have recorded a $31.9 million provision related to certain non income tax items accounted for as a contingency under ASC 450. These risks were identified and recognized as part of the Iponweb Acquisition. We have recorded an indemnification asset in the full amount of the provision as the Company is indemnified against certain tax liabilities under the Framework Purchase Agreement (FPA). The indemnification asset is recorded as part of "Other non current assets" on the consolidated statement of financial position.

Note 15. Breakdown of Revenue and Non-Current Assets by Geographical Areas

The Company operates in the following three geographical markets:

• Americas (North and South America);

• EMEA (Europe, Middle-East and Africa); and

• Asia-Pacific.

The following tables disclose our consolidated revenue for each geographical area for each of the reported periods. Revenue by geographical area is based on the location of advertisers’ campaigns or of the retailers.


Three Months Ended	Americas		EMEA		Asia-Pacific		Total
	(in thousands)
June 30, 2024	$	212,374	$	168,496	$	90,437	$	471,307
June 30, 2023	$	208,465	$	163,968	$	96,501	$	468,934


Six Months Ended	Americas		EMEA		Asia-Pacific		Total
	(in thousands)
June 30, 2024	$	410,739	$	331,338	$	179,285	$	921,362
June 30, 2023	$	396,753	$	324,182	$	193,015	$	913,950

Revenue generated in other significant countries where we operate is presented in the following table:


	Three Months Ended				Six Months Ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
	(in thousands)

Americas
United States	$	190,725	$	188,257	$	368,002	$	357,848
EMEA
Germany	$	48,876	$	48,418	$	98,753	$	94,200
France	$	22,476	$	24,409	$	43,949	$	47,707
Asia-Pacific
Japan	$	48,853	$	53,862	$	101,997	$	113,554

For each reported period, non-current assets (corresponding to the net book value of tangible and intangible assets, excluding right of use assets related to lease agreements) are presented in the table below. The geographical information includes results from the locations of legal entities.


	Americas		EMEA		Asia-Pacific		Total
	(in thousands)

June 30, 2024	$	82,315	$	193,079	$	13,235	$	288,630
December 31, 2023	$	89,355	$	202,969	$	15,058	$	307,382

Note 16. Subsequent Events

The Company evaluated all subsequent events that occurred after June 30, 2024 through the date of issuance of the unaudited condensed consolidated financial statements and determined there are no significant events that require adjustments or disclosure.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission ("SEC"), on February 23, 2024. In addition to our historical condensed consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in Part II, Item 1A, "Risk Factors."

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States of America ("GAAP"), we present Contribution ex-TAC, and Adjusted EBITDA, which are non-GAAP financial measures. We define Contribution ex-TAC as a profitability measure akin to gross profit. It is calculated by deducting traffic acquisition costs from revenue and reconciled to gross profit through the exclusion of other costs of revenue. Contribution ex-TAC is presented in the section entitled "Contribution excluding Traffic Acquisition Costs", which includes a reconciliation to its most directly comparable GAAP financial measure, Gross Profit. 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, certain restructuring, integration and transformation costs, certain acquisition costs and a loss contingency related to a regulatory matter. Adjusted EBITDA is presented in the section entitled "Adjusted EBITDA", which includes a reconciliation to its most directly comparable GAAP financial measure, Net Income. We also present revenues, traffic acquisition costs and Contribution ex-TAC on a constant currency basis; these measures exclude the impact of foreign currency fluctuations and are computed by applying the average exchange rates for the prior year to the current year figures. A reconciliation is provided in the section entitled "Constant Currency Reconciliation".

We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business. As required by the rules of the SEC, we provide reconciliations of the non-GAAP financial measures contained in this document to the most directly comparable measures under GAAP.

Overview

We are a global technology company driving superior commerce outcomes for marketers and media owners through the world’s leading Commerce Media Platform. We operate in commerce media, the future of digital advertising, leveraging commerce data and artificial intelligence ("AI") to connect ecommerce, digital marketing and media monetization to reach consumers throughout their shopping journey. Our vision is to bring richer experiences to every consumer by supporting a fair and open internet that enables discovery, innovation, and choice – powered by trusted and impactful advertising. We have accelerated and deeply transformed the Company from a single-product to a multi-solution platform provider, fast diversifying our business into new so

Criteo S.A. [CRTO] Filings
10-Q	[2024-08-01]
10-Q	[2024-05-02]
10-K	[2024-02-23]
10-Q	[2023-11-02]
10-Q	[2023-08-02]
10-Q	[2023-05-03]
10-K	[2023-02-24]
10-Q	[2022-11-01]
10-Q	[2022-08-05]
10-Q	[2022-05-05]
10-K	[2022-02-25]
10-Q	[2021-11-03]
10-Q	[2021-08-04]
10-Q	[2021-05-05]
10-K	[2021-02-26]
10-Q	[2020-10-29]
10-Q	[2020-07-31]
10-Q	[2020-04-30]
10-K	[2020-03-02]
10-Q	[2019-10-31]
10-Q	[2019-08-02]
10-Q	[2019-05-09]
10-K	[2019-03-01]
10-Q	[2018-11-05]
10-Q	[2018-08-02]
10-Q	[2018-05-04]
10-K	[2018-03-01]
10-Q	[2017-11-08]
10-Q	[2017-08-08]
10-Q	[2017-05-10]
10-K	[2017-03-01]
10-Q	[2016-11-07]
10-Q	[2016-08-05]
10-Q	[2016-05-04]
10-K	[2016-02-29]
20-F	[2015-03-27]
F-1	[2014-03-06]
20-F	[2014-03-06]
F-1	[2013-09-18]