Chronicle Journal: Finance

Criteo Reports Results For The Fourth Quarter And Fiscal Year 2019

NEW YORK, Feb. 11, 2020 /PRNewswire/ -- Criteo S.A. (NASDAQ: CRTO), the global technology company powering the world's marketers with trusted and impactful advertising, today announced financial results for the fourth quarter and fiscal year ended December 31, 2019.

Q4 2019

  • Revenue decreased 3% year-over-year, or 2% at constant currency1, to $653 million.
  • Revenue excluding Traffic Acquisition Costs, or Revenue ex-TAC2, decreased 2% year-over-year, or 1% at constant currency, to $266 million, representing 41% of revenue.
  • Net income decreased 2% year-over-year to $41 million, representing 6% of revenue.
  • Adjusted EBITDA2 increased 5% to $109 million, representing 41% of Revenue ex-TAC.
  • Diluted EPS increased 14% to $0.65 and Adjusted diluted EPS2 increased 29% to $1.08.
  • Cash flow from operating activities was $59 million and Free Cash Flow2 was $42 million.
  • Our cash position was $419 million as of December 31, 2019, up $54 million year-over-year.

Fiscal Year 2019

  • Revenue declined 2% year-over-year, or increased 1% at constant currency1, to $2,262 million.
  • Revenue ex-TAC2 decreased 2% year-over-year, or increased 0.3% at constant currency, to $947 million, representing 42% of revenue.
  • Net income was $96 million, flat compared to the prior year, representing 4% of revenue.
  • Adjusted EBITDA2 was $299 million, or 32% of Revenue ex-TAC.
  • Diluted EPS increased 5% to $1.38 and Adjusted diluted EPS2 increased 7% to $2.67.
  • Cash flow from operating activities was $223 million and Free Cash Flow2 reached $125 million.

"Megan has already demonstrated her impactful leadership," said JB Rudelle, Chairman. "She has the full support of the Board and we're all confident in her success in driving Criteo forward."

"I am thrilled to lead Criteo into its next chapter," said Megan Clarken, CEO. "We have unbelievable assets and compelling opportunities. I'm confident in our strategic priorities and determined to deliver on them."

"We've delivered on our margin and cash generation targets in a challenging year," said Benoit Fouilland, CFO. "We're committed to maintaining solid profitability and cash flows to support the business in the long run."

Q4 2019 Operating Highlights

  • New solutions, which include all solutions outside of retargeting, grew 44% year-over-year to 16% of total Revenue ex-TAC.
  • One quarter after beta launch, 800 clients were already live with our Consideration products priced on cost-per-impression (or CPM) basis.
  • 23% of our live clients purchased more than one Criteo product, up from 13% in Q4 last year.
  • We added 280 net new clients and maintained high client retention at 90% for all products.
  • Same-client Revenue ex-TAC3 decreased 3% year-over-year at constant currency, up from -4% in Q3.
  • Our direct header-bidding technology now connects to over 4,500 publishers across Web and App.
  • We launched Criteo Certified Partner Program (CCP) in our go-to-market for small midmarket clients.

Revenue and Revenue ex-TAC

Q4 2019

Revenue declined 3% year-over-year, or 2% at constant currency, to $653 million (Q4 2018: $670 million). Revenue ex-TAC decreased 2% year-over-year, or 1% at constant currency, to $266 million (Q4 2018: $272 million). This better-than-expected performance was driven by the decline in our business with existing clients, despite continued adoption of our new solutions across our client base and a strong Holiday Season across regions, partially offset by our growing business with new clients, in particular in the midmarket. Revenue ex-TAC as a percentage of revenue, or Revenue ex-TAC margin, was 41% (Q4 2018: 41%).

  • In the Americas, Revenue declined 3% year-over-year, or 3% at constant currency, to $306 million and represented 47% of total Revenue. Revenue ex-TAC declined 3% year-over-year, or 3% at constant currency, to $117 million and represented 44% of total Revenue ex-TAC.
  • In EMEA, Revenue declined 2% year-over-year, and increased 1% at constant currency, to $217 million and represented 33% of total Revenue. Revenue ex-TAC declined 1% year-over-year, and increased 1% at constant currency, to $92 million and represented 34% of total Revenue ex-TAC.
  • In Asia-Pacific, Revenue declined 2% year-over-year, or 3% at constant currency, to $130 million and represented 20% of total Revenue. Revenue ex-TAC declined 1% year-over-year, or 2% at constant currency, to $57 million and represented 22% of total Revenue ex-TAC.

Fiscal Year 2019

Revenue decreased 2% year-over-year to $2,262 million (2018: $2,300 million), and increased 1% at constant currency. Revenue ex-TAC decreased 2% year-over-year to $947 million (2018: $966 million), and increased 0.3% at constant currency. The performance at constant currency was primarily driven by our business with new clients, in particular in the midmarket, offsetting a slight decline in our business with existing clients, in particular with large customers, despite continued adoption of our new solutions across our client base. The Revenue ex-TAC margin was 42% (2018: 42%).

  • In the Americas, Revenue was $952 million, flat year-over-year, or growing 0.3% at constant currency, and represented 42% of total Revenue. Revenue ex-TAC was $373 million, declining 0.4% year-over-year, or growing 0.2% at constant currency, and represented 39% of total Revenue ex-TAC.
  • In EMEA, Revenue declined 4% year-over-year to $806 million, or increased 1% at constant currency, and represented 36% of total Revenue. Revenue ex-TAC declined 4% year-over-year to $353 million, or grew 1% at constant currency, and represented 37% of total Revenue ex-TAC.
  • In Asia-Pacific, Revenue decreased 1% year-over-year, or 0.2% at constant currency, to $503 million and represented 22% of total Revenue. Revenue ex-TAC declined 1% year-over-year, or 1% at constant currency, to $221 million and represented 24% of total Revenue ex-TAC.

Net Income and Adjusted Net Income

Q4 2019

Net income decreased 2% year-over-year to $41 million (Q4 2018: $42 million). Net income margin as a percentage of revenue was 6% (Q4 2018: 6%). Net income available to shareholders of Criteo S.A. increased 11% year-over-year to $42 million, or $0.65 per share on a diluted basis (Q4 2018: $38 million, or $0.57 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 and deferred price consideration, restructuring costs and the tax impact of these adjustments, increased 23% year-over-year to $70 million, or $1.08 per share on a diluted basis (Q4 2018: $56 million, or $0.84 per share on a diluted basis).

Fiscal Year 2019

Net income was flat year-over-year at $96 million (2018: $96 million). Net income margin as a percentage of revenue was 4% (2018: 4%). Net income available to shareholders of Criteo S.A. increased 2% year-over-year to $91 million, or $1.38 per share on a diluted basis (2018: $89 million, or $1.31 per share on a diluted basis).

Adjusted Net Income increased 4% year-over-year to $175 million, or $2.67 per share on a diluted basis (2018: $169 million, or $2.49 per share on a diluted basis).

Adjusted EBITDA and Operating Expenses

Q4 2019

Adjusted EBITDA increased 5% year-over-year, or 6% at constant currency, to $109 million (Q4 2018: $105 million), largely driven by the positive impact of our disciplined expense management, offsetting the slight Revenue ex-TAC decline over the period. Adjusted EBITDA as a percentage of Revenue ex-TAC, which we refer to as Adjusted EBITDA margin, was 41% (Q4 2018: 39%), an approximately 300-basis point increase year-over-year at constant currency.

Operating expenses increased 3% to $176 million (Q4 2018: $171 million). Operating expenses, excluding the impact of equity awards compensation expense, pension costs, restructuring costs, depreciation and amortization and acquisition-related costs and deferred price consideration, which we refer to as Non-GAAP Operating Expenses, decreased 7% to $138 million (Q4 2018: $149 million), demonstrating the positive impact of our disciplined expense management.

Fiscal Year 2019

Adjusted EBITDA declined 7% year-over-year, or 3% at constant currency, to $299 million (2018: $321 million), primarily driven by the Revenue ex-TAC performance over the period and despite a stronger focus on a more disciplined expense management. Adjusted EBITDA as a percentage of Revenue ex-TAC was 32% (2018: 33%), an approximately 120-basis point decrease year-over-year at constant currency.

Operating expenses were flat year-over-year at $688 million (2018: $687 million). Non-GAAP Operating Expenses declined 1% to 575 million (2018: $581 million), demonstrating our disciplined approach to expense management throughout the year.

Cash Flow and Cash Position

Q4 2019

Cash flow from operating activities decreased 31% year-over-year to $59 million (Q4 2018: $86 million).

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, increased 4% year-over-year to $42 million (Q4 2018: $40 million), representing 38% of Adjusted EBITDA (Q4 2018: 38%).

Cash and cash equivalents increased $54 million year-over-year to $419 million.

Fiscal Year 2019

Cash flow from operating activities decreased 15% year-over-year to $223 million (2018: $261 million).

Free Cash Flow decreased 8% year-over-year to $125 million (2018: $135 million), representing 42% of Adjusted EBITDA (2018: 42%).

Business Outlook

The following forward-looking statements reflect Criteo's expectations as of February 11, 2020.

First quarter 2020 guidance:

  • We expect Revenue ex-TAC to be between $209 million and $212 million, implying constant-currency growth of approximately -10% to -9%.
  • We expect Adjusted EBITDA to be between $58 million and $62 million.

Fiscal year 2020 guidance:

  • We expect Revenue ex-TAC to decline by approximately 10% at constant currency.
  • We expect Adjusted EBITDA margin of approximately 30% of Revenue ex-TAC.

The above guidance for the first quarter and the fiscal year ending December 31, 2020, assumes the following exchange rates for the main currencies impacting our business: a U.S. dollar-euro rate of 0.901, a U.S. dollar-Japanese Yen rate of 110.0, a U.S. dollar-British pound rate of 0.775 and a U.S. dollar-Brazilian real rate of 4.050.

The above guidance assumes no acquisitions are completed during the first quarter and the fiscal year ending December 31, 2020.

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.

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 (the "SEC"): Revenue ex-TAC, Revenue ex-TAC by Region, 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 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 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, restructuring costs, acquisition-related costs and deferred price consideration.

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, restructuring costs, acquisition-related costs and deferred price consideration. 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, restructuring costs, acquisition-related costs and deferred price consideration, 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, acquisition-related costs and deferred price consideration, restructuring 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, acquisition-related costs and deferred price consideration, restructuring 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 is a key measure used by our management and board of directors to evaluate the Company's ability to generate cash. Accordingly, we believe that Free Cash Flow permits 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, restructuring costs, acquisition-related costs and deferred price consideration. 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.

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 for Retail Media, 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, 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 and the fiscal year ending December 31, 2020, 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 our ability to access a consistent supply of internet display advertising inventory and expand access to such inventory, 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 March 1, 2019, and in subsequent Quarterly Reports on Form 10-Q as well as future filings and reports by the Company. 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.

Conference Call Information

Criteo's earnings conference call will take place today, February 11, 2020, at 8:00 AM ET, 2:00 PM CET. The conference call will be webcast live on the Company's website http://ir.criteo.com and will be available for replay.

U.S. callers: 

+1 855 209 8212

• 

International callers: 

+1 412 317 0788 or +33 1 76 74 05 02

Please ask to be joined into the "Criteo S.A." call.

About Criteo

Criteo (NASDAQ: CRTO) is the global technology company powering the world's marketers with trusted and impactful advertising. 2,800 Criteo team members partner with over 20,000 customers and thousands of publishers around the globe to deliver effective advertising across all channels, by applying advanced machine learning to unparalleled data sets. Criteo empowers companies of all sizes with the technology they need to better know and serve their customers. For more information, please visit www.criteo.com.








1 Constant currency measures exclude the impact of foreign currency fluctuations and is computed by applying the 2018 average exchange rates for the relevant period to 2019 figures.

2 Revenue ex-TAC, Revenue ex-TAC margin, Revenue ex-TAC for Retail Media, 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.

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.

Contacts

Criteo Investor Relations
Edouard Lassalle, VP, Head of Market Relations, e.lassalle@criteo.com
Friederike Edelmann, IR Director, f.edelmann@criteo.com

Criteo Public Relations
Isabelle Leung-Tack, VP, Global Communications, i.leungtack@criteo.com

Financial information to follow

 

CRITEO S.A.

Consolidated Statement of Financial Position

(U.S. dollars in thousands, unaudited)




December 31, 2018


December 31, 2019

Assets





Current assets:





Cash and cash equivalents


$

364,426



$

418,763


 Trade receivables, net of allowances of $25.9 million and $16.1 million at December 31, 2018 and 2019, respectively


473,901



481,732


Income taxes


19,370



21,817


Other taxes


53,338



60,924


Other current assets


22,816



17,225


Total current assets


933,851



1,000,461


Property, plant and equipment, net


184,013



194,161


Intangible assets, net


112,036



86,886


Goodwill


312,881



317,100


Right of Use Asset - operating lease (1)




142,044


Non-current financial assets


20,460



21,747


Deferred tax assets


33,894



27,985


    Total non-current assets


663,284



789,923


Total assets


$

1,597,135



$

1,790,384







Liabilities and shareholders' equity





Current liabilities:





Trade payables


$

425,376



$

390,277


Contingencies


2,640



6,385


Income taxes


7,725



3,422


Financial liabilities - current portion


1,018



3,636


Lease liability - operating - current portion (1)




45,853


Other taxes


55,592



50,099


Employee - related payables


65,878



74,781


Other current liabilities


47,115



35,886


Total current liabilities


605,344



610,339


Deferred tax liabilities


10,770



9,272


Retirement benefit obligation


5,537



8,485


Financial liabilities - non current portion


2,490



769


Lease liability - operating - non current portion (1)




117,988


Other non-current liabilities


5,103



5,543


    Total non-current liabilities


23,900



142,057


Total liabilities


629,244



752,396


Commitments and contingencies





Shareholders' equity:





Common shares, €0.025 par value, 67,708,203 and 66,197,181 shares authorized, issued and outstanding at December 31, 2018 and December 31, 2019, respectively.


2,201



2,158


Treasury stock, 3,459,119 and 3,903,673 shares at cost as of December 31, 2018 and  December 31, 2019, respectively.


(79,159)



(74,900)


Additional paid-in capital


663,281



668,389


Accumulated other comprehensive (loss)


(30,522)



(40,105)


Retained earnings


387,869



451,725


Equity - attributable to shareholders of Criteo S.A.


943,670



1,007,267


Non-controlling interests


24,221



30,721


Total equity


967,891



1,037,988


Total equity and liabilities


$

1,597,135



$

1,790,384



(1)  Effective January 1, 2019 we have adopted ASC 842, Leases. We have elected the modified retrospective transition method and not restated comparative prior periods.  Upon adoption, we recognized total operating lease liabilities of $223.5 million and operating right-of-use assets of $204.3 million.

 

CRITEO S.A.

Consolidated Statement of Income

(U.S. dollars in thousands, except share and per share data, unaudited)




Three Months Ended




Twelve Months Ended





December 31,




December 31,





2018


2019


YoY
Change


2018


2019


YoY
Change














Revenue


$

670,096



$

652,640



(3)

%


$

2,300,314



$

2,261,516



(2)

%














Cost of revenue













Traffic acquisition cost


(398,238)



(386,388)



(3)

%


(1,334,334)



(1,314,947)



(1)

%

Other cost of revenue


(38,807)



(31,328)



(19)

%


(131,744)



(117,533)



(11)

%














Gross profit


233,051



234,924



1

%


834,236



829,036



(1)

%














Operating expenses:













Research and development expenses


(44,605)



(40,585)



(9)

%


(179,263)



(172,591)



(4)

%

Sales and operations expenses


(93,806)



(98,080)



5

%


(372,707)



(375,477)



1

%

General and administrative expenses


(32,461)



(37,382)



15

%


(135,159)



(139,754)



3

%

Total Operating expenses


(170,872)



(176,047)



3

%


(687,129)



(687,822)



0.1

%

Income from operations


62,179



58,877



(5)

%


147,107



141,214



(4)

%

Financial income (expense)


(1,746)



(1,521)



(13)

%


(5,084)



(5,749)



13

%

Income before taxes


60,433



57,356



(5)

%


142,023



135,465



(5)

%

Provision for income taxes


(18,299)



(15,882)



(13)

%


(46,144)



(39,496)



(14)

%

Net Income


$

42,134



$

41,474



(2)

%


$

95,879



$

95,969



0.1

%














Net income available to shareholders of Criteo S.A.


$

37,966



$

42,024



11

%


$

88,644



$

90,745



2

%

Net income available to non-controlling interests


$

4,168



$

(550)



NM


$

7,235



$

5,224



(28)

%














Weighted average shares outstanding used in computing per share amounts:













Basic


66,220,030



63,430,621





66,456,890



64,305,965




Diluted


67,043,794



64,655,065





67,662,904



65,598,588

















Net income allocated to shareholders per share:













Basic


$

0.57



$

0.66



16

%


$

1.33



$

1.41



6

%

Diluted


$

0.57



$

0.65



14

%


$

1.31



$

1.38



5

%

 

CRITEO S.A.

Consolidated Statement of Cash Flows

(U.S. dollars in thousands, unaudited)




Three Months Ended




Twelve Months Ended





December 31,




December 31,





2018


2019


YoY
Change


2018


2019


YoY
Change

Net income


$

42,134



$

41,474



(2)

%


$

95,879



$

95,969



0.1

%

Non-cash and non-operating items


50,628



53,546



6

%


154,436



126,281



(18)

%

           - Amortization and provisions


32,785



39,729



21

%


111,825



97,110



(13)

%

           - Equity awards compensation expense (1)


10,267



4,239



(59)

%


66,600



40,999



(38)

%

           - Change in deferred taxes


1,184



16,792



NM


(8,157)



15,418



NM

           - Change in income taxes


6,244



(8,076)



NM


(12,744)



(28,015)



NM

           - Other (2)


148



862



NM


(3,088)



769



NM

Changes in working capital related to operating activities


(7,162)



(35,661)



NM


10,411



582



(94)

%

           - (Increase)/Decrease in trade receivables


(113,019)



(119,288)



6

%


1,358



876



(35)

%

           - Increase/(Decrease) in trade payables


85,646



63,750



(26)

%


9,047



(14,145)



NM

           - (Increase)/Decrease in other current assets


(1,576)



5,481



NM


3,974



7,631



92

%

           - Increase/(Decrease) in other current liabilities (2)


21,787



16,116



(26)

%


(3,968)



11,390



NM

           - Change in operating lease liabilities and right of use assets (3)




(1,720)



NM




(5,170)



NM

CASH FROM OPERATING ACTIVITIES


85,600



59,359



(31)

%


260,726



222,832



(15)

%

Acquisition of intangible assets, property, plant and equipment


(30,064)



(13,373)



(56)

%


(116,984)



(82,716)



(29)

%

Change in accounts payable related to intangible assets, property, plant and equipment


(15,344)



(4,147)



(73)

%


(8,494)



(15,224)



79

%

(Payment for) disposal of a business, net of cash acquired (disposed)


(52,269)





(100)

%


(101,180)



(4,582)



(95)

%

Change in other non-current financial assets


(56)



(17)



(70)

%


(59)



(1,366)



NM

CASH USED FOR INVESTING ACTIVITIES


(97,733)



(17,537)



(82)

%


(226,717)



(103,888)



(54)

%

Repayment of borrowings


(243)



(516)



NM


(964)



(1,022)



6

%

Net payments related to equity award activities


699



1,053



51

%


1,473



1,691



15

%

Change in treasury stock


(80,000)



(40,985)



(49)

%


(80,000)



(58,588)



(27)

%

Change in other financial liabilities (2)


141



(25)



NM


16,815



(1,192)



NM

CASH USED FOR FINANCING ACTIVITIES


(79,403)



(40,473)



(49)

%


(62,676)



(59,111)



(6)

%

Effect of exchange rates changes on cash and cash equivalents (2)


(2,728)



8,236



NM


(21,018)



(5,496)



(74)

%

Net increase (decrease) in cash and cash equivalents


(94,264)



9,585



NM


(49,685)



54,337



NM

Net cash and cash equivalents at beginning of period


458,690



409,178



(11)

%


414,111



364,426



(12)

%

Net cash and cash equivalents at end of period


$

364,426



$

418,763



15

%


$

364,426



$

418,763



15

%

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION













Cash paid for taxes, net of refunds


$

(10,871)



$

(7,166)



(34)

%


$

(67,045)



$

(52,093)



(22)

%

Cash paid for interest, net of amounts capitalized


$

(433)



$

(308)



(29)

%


$

(1,695)



$

(1,403)



(17)

%


(1) Share-based compensation expense according to ASC 718 Compensation - stock compensation accounted for $9.8 million and $3.9 million of equity awards compensation expense for the quarter ended December 31, 2018 and 2019, respectively, and $65.1 million and $39.6 million of equity awards compensation for the twelve months ended December 31, 2018 and 2019, respectively.


(2) From 2017, the Company reported the cash impact of the settlement of hedging derivatives related to financing activities in cash used for financing activities in the unaudited consolidated statements of cash flows


(3)  Effective January 1, 2019 we have adopted ASC 842, Leases. We have elected the modified retrospective transition method and not restated prior periods. Changes in operating lease liabilities and right of use assets included rent prepayments and accrued rent amounts which were mapped to other current assets and trade payables in prior years.

 

CRITEO S.A.

Reconciliation of Cash from Operating Activities to Free Cash Flow

(U.S. dollars in thousands, unaudited)




Three Months Ended




Twelve Months Ended





December 31,




December 31,





2018


2019


YoY
Change


2018


2019


YoY
Change














CASH FROM OPERATING ACTIVITIES


$

85,600



$

59,359



(31)

%


$

260,726



$

222,832



(15)

%

Acquisition of intangible assets, property, plant and equipment


(30,064)



(13,373)



(56)

%


(116,984)



(82,716)



(29)

%

Change in accounts payable related to intangible assets, property, plant and equipment


(15,344)



(4,147)



(73)

%


(8,494)



(15,224)



79

%

FREE CASH FLOW (1)


$

40,192



$

41,839



4

%


$

135,248



$

124,892



(8)

%


(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.

 

CRITEO S.A.

Reconciliation of Revenue ex-TAC by Region to Revenue by Region

(U.S. dollars in thousands, unaudited)





Three Months Ended






Twelve Months Ended








December 31,






December 31,






Region


2018


2019


YoY
Change


YoY
Change at
Constant
Currency


2018


2019


YoY
Change


YoY
Change at
Constant
Currency

Revenue


















Americas


$

317,350



$

306,250



(3)

%


(3)

%


$

954,073



$

952,154



(0.2)

%


0.3

%


EMEA


220,904



216,639



(2)

%


1

%


839,825



806,197



(4)

%


1

%


Asia-Pacific


131,842



129,751



(2)

%


(3)

%


506,416



503,165



(1)

%


(0.2)

%


Total


670,096



652,640



(3)

%


(2)

%


2,300,314



2,261,516



(2)

%


1

%



















Traffic acquisition costs


















Americas


(196,168)



(189,092)



(4)

%


(3)

%


(579,597)



(579,175)



(0.1)

%


0.3

%


EMEA


(128,053)



(124,939)



(2)

%


0.4

%


(471,654)



(453,530)



(4)

%


2

%


Asia-Pacific


(74,017)



(72,357)



(2)

%


(4)

%


(283,083)



(282,242)



(0.3)

%


0.2

%


Total


(398,238)



(386,388)



(3)

%


(2)

%


(1,334,334)



(1,314,947)



(1)

%


1

%



















Revenue ex-TAC (1)


















Americas


121,182



117,158



(3)

%


(3)

%


374,476



372,979



(0.4)

%


0.2

%


EMEA


92,851



91,700



(1)

%


1

%


368,171



352,667



(4)

%


1

%


Asia-Pacific


57,825



57,394



(1)

%


(2)

%


223,333



220,923



(1)

%


(1)

%


Total


$

271,858



$

266,252



(2)

%


(1)

%


$

965,980



$

946,569



(2)

%


0.3

%



(1) We define Revenue ex-TAC as our revenue excluding traffic acquisition costs generated over the applicable measurement period. Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region are not measures calculated in accordance with U.S. GAAP. We have included Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region 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 can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region 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 and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region 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 and Revenue ex-TAC by Region or similarly titled measures but define the regions 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 and Revenue ex-TAC by Region alongside our other U.S. GAAP financial results, including revenue. The above table provides a reconciliation of Revenue ex-TAC to revenue and Revenue ex-TAC by Region to revenue by region.

 

CRITEO S.A.

Reconciliation of Adjusted EBITDA to Net Income

(U.S. dollars in thousands, unaudited)




Three Months Ended




Twelve Months Ended





December 31,




December 31,





2018


2019


YoY
Change


2018


2019


YoY
Change

Net income


$

42,134



$

41,474



(2)

%


$

95,879



$

95,969



0.1

%

Adjustments:













Financial (income) expense


1,746



1,521



(13)

%


5,084



5,749



13

%

Provision for income taxes


18,299



15,882



(13)

%


46,144



39,496



(14)

%

Equity awards compensation expense


10,267



9,089



(11)

%


67,076



49,132



(27)

%

Research and development


5,005



3,578



(29)

%


21,232



15,036



(29)

%

Sales and operations


5,793



3,009



(48)

%


29,244



19,301



(34)

%

General and administrative


(531)



2,502



NM


16,600



14,795



(11)

%

Pension service costs


419



383



(9)

%


1,691



1,556



(8)

%

Research and development


204



188



(8)

%


844



760



(10)

%

Sales and operations


88



69



(22)

%


325



283



(13)

%

General and administrative


127



126



(1)

%


522



513



(2)

%

Depreciation and amortization expense


30,675



30,489



(1)

%


103,500



93,488



(10)

%

Cost of revenue


20,477



12,691



(38)

%


67,347



44,866



(33)

%

Research and development (1)


3,412



5,248



54

%


10,602



16,508



56

%

Sales and operations (1)


4,831



10,763



NM


18,245



24,914



37

%

General and administrative


1,955



1,787



(9)

%


7,306



7,200



(1)

%

Acquisition-related costs


1,222





(100)

%


1,738





(100)

%

General and administrative


1,222





(100)

%


1,738





(100)

%

Restructuring cost (2)




10,661



NM


(53)



13,582



NM

Research and development




1,704



NM


(332)



2,000



NM

Sales and operations




6,614



NM


290



8,810



NM

General and administrative




2,343



NM


(11)



2,772



NM

Total net adjustments


62,628



68,025



9

%


225,180



203,003



(10)

%

Adjusted EBITDA (3)


$

104,762



$

109,499



5

%


$

321,059



$

298,972



(7)

%


(1) For the Three Months Ended December 31, 2019 and the Twelve Months Ended December 31, 2019, respectively, the Company recognized an accelerated amortization for Manage technology due to a revised useful life ($2.2 million in Research and development) and an impairment loss for Manage customers relationships ($4.6 million in Sales and operations).


(2) For the Three Months Ended December 31, 2019 and the Twelve Months Ended December 31, 2019, respectively, the Company recognized restructuring charges for its new organizational structure implemented to support its multi-product platform strategy as detailed below:



Three Months Ended


Twelve Months Ended


December 31, 2019

(Gain) from forfeitures of share-based compensation expense

(4,849)



(8,133)


Depreciation and amortization expense

(67)



1,161


Facilities and impairment related costs

9,432



11,080


Payroll related costs

6,145



9,474


Total restructuring costs

10,661



13,582



(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, restructuring costs, acquisition-related costs and deferred price consideration. 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, restructuring costs, acquisition-related costs and deferred price consideration 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.

 

CRITEO S.A.

Reconciliation from Non-GAAP Operating Expenses to Operating Expenses under GAAP

(U.S. dollars in thousands, unaudited)




Three Months Ended




Twelve Months Ended





December 31,




December 31,





2018


2019


YoY
Change


2018


2019


YoY
Change














Research and Development expenses


$

(44,605)



$

(40,585)



(9)

%


$

(179,263)



$

(172,591)



(4)

%

Equity awards compensation expense


5,005



3,578



(29)

%


21,232



15,036



(29)

%

Depreciation and Amortization expense (1)


3,412



5,248



54

%


10,602



16,508



56

%

Pension service costs


204



188



(8)

%


844



760



(10)

%

Restructuring costs (2)




1,704



NM


(332)



2,000



NM

Non GAAP - Research and Development expenses


(35,984)



(29,867)



(17)

%


(146,917)



(138,287)



(6)

%

Sales and Operations expenses


(93,806)



(98,080)



5

%


(372,707)



(375,477)



1

%

Equity awards compensation expense


5,793



3,009



(48)

%


29,244



19,301



(34)

%

Depreciation and Amortization expense (1)


4,831



10,763



NM


18,245



24,914



37

%

Pension service costs


88



69



(22)

%


325



283



(13)

%

Restructuring costs (2)




6,614



NM


290



8,810



NM

Non GAAP - Sales and Operations expenses


(83,094)



(77,625)



(7)

%


(324,603)



(322,169)



(1)

%

General and Administrative expenses


(32,461)



(37,382)



15

%


(135,159)



(139,754)



3

%

Equity awards compensation expense


(531)



2,502



NM


16,600



14,795



(11)

%

Depreciation and Amortization expense


1,955



1,787



(9)

%


7,306



7,200



(1)

%

Pension service costs


127



126



(1)

%


522



513



(2)

%

Acquisition related costs


1,222





(100)

%


1,738





(100)

%

Restructuring costs (2)




2,343



NM


(11)



2,772



NM

Non GAAP - General and Administrative expenses


(29,688)



(30,624)



3

%


(109,004)



(114,474)



5

%

Total Operating expenses


(170,872)



(176,047)



3

%


(687,129)



(687,822)



0.1

%

Equity awards compensation expense


10,267



9,089



(11)

%


67,076



49,132



(27)

%

Depreciation and Amortization expense


10,198



17,798



75

%


36,153



48,622



34

%

Pension service costs


419



383



(9)

%


1,691



1,556



(8)

%

Acquisition-related costs


1,222





(100)

%


1,738





(100)

%

Restructuring costs (2)




10,661



NM


(53)



13,582



NM

Total Non GAAP Operating expenses (3)


$

(148,766)



$

(138,116)



(7)

%


$

(580,524)



$

(574,930)



(1)

%


(1) For the Three Months Ended December 31, 2019 and the Twelve Months Ended December 31, 2019, respectively, the Company recognized an accelerated amortization for Manage technology due to a revised useful life ($2.2 million in Research and development) and an impairment loss for Manage customers relationships ($4.6 million in Sales and operations).


(2) For the Three Months Ended December 31, 2019 and the Twelve Months Ended December 31, 2019, respectively, the Company recognized restructuring charges for its new organizational structure implemented to support its multi-product platform strategy as detailed below:



Three Months Ended


Twelve Months Ended


December 31, 2019

(Gain) from forfeitures of share-based compensation expense

(4,849)



(8,133)


Depreciation and amortization expense

(67)



1,161


Facilities and impairment related costs

9,432



11,080


Payroll related costs

6,145



9,474


Total restructuring costs

10,661



13,582



(3) 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, restructuring costs, acquisition-related costs and deferred price consideration. 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.

 

CRITEO S.A.

Detailed Information on Selected Items

(U.S. dollars in thousands, unaudited)




Three Months Ended




Twelve Months Ended





December 31,




December 31,





2018


2019


YoY
Change


2018


2019


YoY
Change

Equity awards compensation expense













Research and development


$

5,005



$

3,578



(29)

%


$

21,232



$

15,036



(29)

%

Sales and operations


5,793



3,009



(48)

%


29,244



19,301



(34)

%

General and administrative


(531)



2,502



NM


16,600



14,795



(11)

%

Total equity awards compensation expense


10,267



9,089



(11)

%


67,076



49,132



(27)

%














Pension service costs













Research and development


204



188



(8)

%


844



760



(10)

%

Sales and operations


88



69



(22)

%


325



283



(13)

%

General and administrative


127



126



(1)

%


522



513



(2)

%

Total pension service costs


419



383



(9)

%


1,691



1,556



(8)

%














Depreciation and amortization expense













Cost of revenue


20,477



12,691



(38)

%


67,347



44,866



(33)

%

Research and development (1)


3,412



5,248



54

%


10,602



16,508



56

%

Sales and operations (1)


4,831



10,763



NM


18,245



24,914



37

%

General and administrative


1,955



1,787



(9)

%


7,306



7,200



(1)

%

Total depreciation and amortization expense


30,675



30,489



(1)

%


103,500



93,488



(10)

%














Acquisition-related costs













General and administrative


1,222





(100)

%


1,738





(100)

%

Total acquisition-related costs


1,222





(100)

%


1,738





(100)

%














Restructuring costs (2)













Research and development




1,704



NM


(332)



2,000



NM

Sales and operations




6,614



NM


290



8,810



NM

General and administrative




2,343



NM


(11)



2,772



NM

Total restructuring costs


$



$

10,661



NM


$

(53)



$

13,582



NM


(1) For the Three Months Ended December 31, 2019 and the Twelve Months Ended December 31, 2019, respectively, the Company recognized an accelerated amortization for Manage technology due to a revised useful life ($2.2 million in Research and development) and an impairment loss for Manage customers relationships ($4.6 million in Sales and operations) .


(2) For the Three Months Ended December 31, 2019 and the Twelve Months Ended December 31, 2019, respectively, the Company recognized restructuring charges for its new organizational structure implemented to support its multi-product platform strategy as detailed below:



Three Months Ended


Twelve Months Ended


December 31, 2019

(Gain) from forfeitures of share-based compensation expense

(4,849)



(8,133)


Depreciation and amortization expense

(67)



1,161


Facilities and impairment related costs

9,432



11,080


Payroll related costs

6,145



9,474


Total restructuring costs

10,661



13,582


 

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




Twelve Months Ended





December 31,




December 31,





2018


2019


YoY
Change


2018


2019


YoY
Change














Net income


$

42,134



$

41,474



(2)

%


$

95,879



$

95,969



0.1

%

Adjustments:













Equity awards compensation expense


10,267



9,089



(11)

%


67,076



49,132



(27)

%

Amortization of acquisition-related intangible assets (1)


4,996



11,513



NM


15,821



27,906



76

%

Acquisition-related costs


1,222





(100)

%


1,738





(100)

%

Restructuring costs (2)




10,661



NM


(53)



13,582



NM

Tax impact of the above adjustments


(2,218)



(3,219)



(45)

%


(11,723)



(11,190)



(5)

%

Total net adjustments


14,267



28,044



97

%


72,859



79,430



9

%

Adjusted net income (3)


$

56,401



$

69,518



23

%


$

168,738



$

175,399



4

%














Weighted average shares outstanding













 - Basic


66,220,030



63,430,621





66,456,890



64,305,965




 - Diluted


67,043,794



64,655,065





67,662,904



65,598,588

















Adjusted net income per share













 - Basic


$

0.85



$

1.10



29

%


$

2.54



$

2.73



7

%

 - Diluted


$

0.84



$

1.08



29

%


$

2.49



$

2.67



7

%


(1) For the Three Months Ended December 31, 2019 and the Twelve Months Ended December 31, 2019, respectively, the Company recognized an accelerated amortization for Manage technology due to a revised useful life ($2.2 million in Research and development) and an impairment loss for Manage customers relationships ($4.6 million in Sales and operations) .


(2) For the Three Months Ended December 31, 2019 and the Twelve Months Ended December 31, 2019, respectively, the Company recognized restructuring charges for its new organizational structure implemented to support its multi-product platform strategy as detailed below:



Three Months Ended


Twelve Months Ended


December 31, 2019

(Gain) from forfeitures of share-based compensation expense

(4,849)



(8,133)


Depreciation and amortization expense

(67)



1,161


Facilities and impairment related costs

9,432



11,080


Payroll and Facilities related costs

6,145



9,474


Total restructuring costs

10,661



13,582



(3) 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, restructuring costs, acquisition-related costs and deferred price consideration 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, acquisition-related costs and deferred price consideration, restructuring 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.

 

CRITEO S.A.

Constant Currency Reconciliation

(U.S. dollars in thousands, unaudited)




Three Months Ended




Twelve Months Ended





December 31,




December 31,





2018


2019


YoY
Change


2018


2019


YoY
Change














Revenue as reported


$

670,096



$

652,640



(3)

%


$

2,300,314



$

2,261,516



(2)

%

Conversion impact U.S. dollar/other currencies




5,531







51,373




Revenue at constant currency(1)


670,096



658,171



(2)

%


2,300,314



2,312,889



1

%














Traffic acquisition costs as reported


(398,238)



(386,388)



(3)

%


(1,334,334)



(1,314,947)



(1)

%

Conversion impact U.S. dollar/other currencies




(3,249)







(28,831)




Traffic Acquisition Costs at constant currency(1)


(398,238)



(389,637)



(2)

%


(1,334,334)



(1,343,778)



1

%














Revenue ex-TAC as reported(2)


271,858



266,252



(2)

%


965,980



946,569



(2)

%

Conversion impact U.S. dollar/other currencies




2,283







22,542




Revenue ex-TAC at constant currency(2)


271,858



268,535



(1)

%


965,980



969,111



0.3

%

Revenue ex-TAC(2)/Revenue as reported


41

%


41

%




42

%


42

%
















Other cost of revenue as reported


(38,807)



(31,328)



(19)

%


(131,744)



(117,533)



(11)

%

Conversion impact U.S. dollar/other currencies




(291)







(1,856)




Other cost of revenue at constant currency(1)


(38,807)



(31,619)



(19)

%


(131,744)



(119,389)



(9)

%














Adjusted EBITDA(3)


104,762



109,499



5

%


321,059



298,972



(7)

%

Conversion impact U.S. dollar/other currencies




1,936







11,370




Adjusted EBITDA(3) at constant currency(1)


$

104,762



$

111,435



6

%


$

321,059



$

310,342



(3)

%

Adjusted EBITDA(3)/Revenue ex-TAC(2)


39

%


41

%




33

%


32

%




(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 by Region to Revenue by Region" 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.

 

CRITEO S.A.

Information on Share Count

(unaudited)




Twelve Months Ended



December 31,



2018


2019

Shares outstanding as at January 1,


66,085,097



64,249,084


Weighted average number of shares issued during the period


371,793



56,881


Basic number of shares - Basic EPS basis


66,456,890



64,305,965


Dilutive effect of share options, warrants, employee warrants - Treasury method


1,206,014



1,292,623


Diluted number of shares - Diluted EPS basis


67,662,904



65,598,588







Shares issued as at December 31, before Treasure stocks


67,708,203



66,197,181


Treasury stock as of December 31,


(3,459,119)



(3,903,673)


Shares outstanding as of December 31, after Treasury stocks


64,249,084



62,293,508


Total dilutive effect of share options, warrants, employee warrants


8,259,272



7,914,860


Fully diluted shares as at December 31,


72,508,356



70,208,368


 

CRITEO S.A.

Supplemental Financial Information and Operating Metrics

(U.S. dollars in thousands except where stated, unaudited)



Q1
2018

Q2
2018

Q3
2018

Q4
2018

Q1
2019

Q2
2019

Q3
2019

Q4
2019

YoY
Change

QoQ Change












Clients

18,528

18,936

19,213

19,419

19,373

19,733

19,971

20,247

4%

1%












Revenue

564,164

537,185

528,869

670,096

558,123

528,147

522,606

652,640

(3)%

25%

Americas

212,695

212,781

211,247

317,350

217,993

213,974

213,937

306,250

(3)%

43%

EMEA

222,611

201,080

195,230

220,904

209,643

194,359

185,556

216,639

(2)%

17%

APAC

128,858

123,324

122,392

131,842

130,487

119,814

123,113

129,751

(2)%

5%












TAC

(323,746)

(306,963)

(305,387)

(398,238)

(322,429)

(304,229)

(301,901)

(386,388)

(3)%

28%

Americas

(131,521)

(125,502)

(126,406)

(196,168)

(131,545)

(129,491)

(129,047)

(189,092)

(4)%

47%

EMEA

(119,893)

(112,577)

(111,131)

(128,053)

(117,291)

(107,401)

(103,899)

(124,939)

(2)%

20%

APAC

(72,332)

(68,884)

(67,850)

(74,017)

(73,593)

(67,337)

(68,955)

(72,357)

(2)%

5%












Revenue ex-TAC (1)

240,418

230,222

223,482

271,858

235,694

223,918

220,705

266,252

(2)%

21%

Americas

81,174

87,279

84,841

121,182

86,448

84,483

84,890

117,158

(3)%

38%

EMEA

102,718

88,503

84,099

92,851

92,352

86,958

81,657

91,700

(1)%

12%

APAC

56,526

54,440

54,542

57,825

56,894

52,477

54,158

57,394

(1)%

6%












Cash flow from operating activities

84,527

40,341

50,256

85,600

67,220

52,964

43,289

59,359

(31)%

37%












Capital expenditures

32,567

17,847

29,656

45,408

23,684

32,792

23,944

17,520

(61)%

(27)%












Capital expenditures/Revenue

6%

3%

6%

7%

4%

6%

5%

3%

N.A

N.A












Net cash position

483,874

480,285

458,690

364,426

395,771

422,053

409,178

418,763

15%

2%












Headcount

2,675

2,678

2,737

2,744

2,813

2,873

2,794

2,755

0.4%

(1)%












Days Sales Outstanding (days - end of month)

60

61

60

58

59

58

57

52

N.A

N.A


(1) We define Revenue ex-TAC as our revenue excluding traffic acquisition costs generated over the applicable measurement period. Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region are not measures calculated in accordance with U.S. GAAP. We have included Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region 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 can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region 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 and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region 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 and Revenue ex-TAC by Region or similarly titled measures but define the regions 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 and Revenue ex-TAC by Region alongside our other U.S. GAAP financial results, including revenue. The above table provides a reconciliation of Revenue ex-TAC to revenue and Revenue ex-TAC by Region to revenue by region.

 

Cision View original content:http://www.prnewswire.com/news-releases/criteo-reports-results-for-the-fourth-quarter-and-fiscal-year-2019-301002343.html

SOURCE Criteo S.A.

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