Chronicle Journal: Finance

Criteo Reports Third Quarter 2020 Financial Results

NEW YORK, Oct. 28, 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 third quarter ended September 30, 2020 that exceeded the top end of its most recent quarterly guidance, despite the continued impact of the pandemic.

Third Quarter 2020 Financial Highlights:

Our financial results reflect the continued impact of the pandemic on our business. The following table summarizes our consolidated financial results for the three months ended September 30, 2019 and 2020:


Three Months Ended


September 30,


2020


2019


YoY

Change


(in millions, except EPS data)

GAAP Results






Revenue

$

470



$

523



(10)

%

Net Income

$

5



$

21



(74)

%

Diluted EPS

$

0.09



$

0.28



$ (0.19)


Cash from operating activities

$

51



$

43



18

%

Net cash position

$

627



$

409



53

%







Non-GAAP Results1






Revenue ex-TAC

$

186



$

221



(16)

%

Revenue ex-TAC margin

40

%


42

%



Adjusted EBITDA

$

49



$

64



(23)

%

Adjusted diluted EPS

$

0.40



$

0.54



$ (0.14)


Free Cash Flow

$

38



$

19



98

%

 

Megan Clarken, Chief Executive Officer of Criteo, said, "We are pleased to deliver better performance than expected on both the top and bottom lines, demonstrating the continued resilience of our business during the pandemic, relentless focus on improving execution and the talent, strength and dedication of our great people."

Clarken continued: "As we look forward, we are transforming our company to a Commerce Media Platform over the next few years to maximize the value of our unique Reach and Commerce assets, enabling our strong customer base, including global brands and retailers, to optimize their sales and digital advertising returns. We believe we have a path to growth over time with a clear product roadmap, a dedicated leadership team and the financial strength to support growth investments."

Operating Highlights

  • Criteo and The Trade Desk collaborate on industry wide Unified ID 2.0, an upgraded alternative to third-party cookies.
  • Total clients grew 3% year-over-year to close to 20,600 after adding over 200 net new clients, the highest number since Q4 2019.
  • Same-client revenue2 declined 6% year-over-year (vs. 13% decline in Q2 2020) and same-client Revenue ex-TAC2 decreased 11% year-over-year (vs. 14% decline in Q2 2020) at constant currency3, including approximately 17 points directly attributable to the COVID-19 disruption on both.
  • New solutions grew 43% year-over-year to 19% of total Revenue ex-TAC.
  • Retail Media grew close to 60% year-over-year, and same-client Revenue ex-TAC3 for Retail Media increased 70% year-over-year.
  • Our direct header-bidding technology now connects to close to 5,000 direct publishers.

___________________________________________________


1

Revenue excluding Traffic Acquisition Costs, or Revenue ex-TAC, Revenue ex-TAC margin, Adjusted EBITDA, Adjusted EBITDA at constant currency, Adjusted EBITDA margin, Adjusted diluted EPS, Free Cash Flow and growth at constant currency are not measures calculated in accordance with U.S. GAAP.

2

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.

3

Constant currency measures exclude the impact of foreign currency fluctuations and is computed by applying the 2019 average exchange rates for the relevant period to 2020 figures.

Financial Summary

Revenue for the quarter was $470 million and Revenue ex-TAC was $186 million. Adjusted EBITDA was over $49 million, resulting in an adjusted diluted EPS of $0.40. These all reflect year-over-year declines, largely due to the anticipated negative COVID impact. Excluding the impact of the pandemic, we estimate that Revenue ex-TAC declined about 2% in Q3 2020. Free cash flow was $38 million in Q3 2020, growing 98% year-over-year, and $98 million for the nine months 2020. We have $627M cash on the balance sheet, which includes $158M from the Revolving Credit Facility.

Sarah Glickman, Chief Financial Officer, said, "During Q3 we continued to make progress against all four of our strategic pillars and I am pleased that we were able to control costs and grow free cash flow. Our goal now is to return to growth and ensure smart investment allocation while reducing fixed costs."

Revenue and Revenue ex-TAC

Revenue declined 10% year-over-year, or 11% at constant currency, to $470 million (Q3 2019: $523 million), after an estimated $80 million net negative business impact from the COVID-19 disruption, or approximately 15 points of the year-over-over decline at constant currency. Revenue ex-TAC decreased 16% year-over-year, or 16% at constant currency, to $186 million (Q3 2019: $221 million), after an approximately $33 million net negative business impact from the COVID-19 disruption, or approximately 15 points of the year-over-over decline at constant currency. Growth in our midmarket business and increased adoption of new solutions were offset by the decline in our core business with large clients, primarily as a result of the COVID-19 pandemic impact, in particular on our Travel and Classifieds clients. Revenue ex-TAC as a percentage of revenue, or Revenue ex-TAC margin, was 40% (Q3 2019: 42%).

  • In the Americas, Revenue declined 4% year-over-year, or 3% at constant currency, to $205 million and represented 43% of total Revenue. Revenue ex-TAC declined 13% year-over-year, or 11% at constant currency, to $74 million and represented 40% of total Revenue ex-TAC.
  • In EMEA, Revenue declined 10% year-over-year, or 13% at constant currency, to $168 million and represented 36% of total Revenue. Revenue ex-TAC declined 14% year-over-year, or 17% at constant currency, to $71 million and represented 38% of total Revenue ex-TAC.
  • In Asia-Pacific, Revenue declined 20% year-over-year, or 21% at constant currency, to $98 million and represented 21% of total Revenue. Revenue ex-TAC declined 23% year-over-year, or 24% at constant currency, to $42 million and represented 22% of total Revenue ex-TAC.

Net Income and Adjusted Net Income

Net income decreased 74% year-over-year to $5 million (Q3 2019: $21 million). Net income margin as a percentage of revenue was 1% (Q3 2019: 4%). In the course of the third quarter 2020, we incurred $12 million in restructuring related and transformation costs. Net income available to shareholders of Criteo S.A. decreased 72% year-over-year to $5 million, or $0.09 per share on a diluted basis (Q3 2019: $19 million, or $0.28 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 related and transformation costs and the tax impact of these adjustments, decreased 31% year-over-year to $24 million, or $0.40 per share on a diluted basis (Q3 2019: $35 million, or $0.54 per share on a diluted basis).

Adjusted EBITDA and Operating Expenses

Adjusted EBITDA decreased 23% year-over-year, or 27% at constant currency, to $49 million (Q3 2019: $64 million), driven by the Revenue ex-TAC performance over the period, including the still meaningful impact of the COVID-19 pandemic, partly offset by effective expense management measures. Adjusted EBITDA as a percentage of Revenue ex-TAC, or Adjusted EBITDA margin, was 27% (Q3 2019: 29%).

Operating expenses decreased 11% or $17 million, to $143 million (Q3 2019: $160 million), mostly driven by lower headcount-related expense and disciplined expense management across the Company. Operating expenses, excluding the impact of equity awards compensation expense, pension costs, restructuring related and transformation costs, depreciation and amortization and acquisition-related costs and deferred price consideration, which we refer to as Non-GAAP Operating Expenses, decreased 15% or $21 million, to $117 million (Q3 2019: $138 million), largely driven by lower headcount and robust expense management across the Company.

The Company intends to manage its expense base in a disciplined way, while also investing in growth and innovation.

Cash Flow, Cash and Financial Liquidity Position

Cash flow from operating activities increased 18% year-over-year to $51 million (Q3 2019: $43 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 98% to $38 million (Q3 2019: $19 million), representing 77% of Adjusted EBITDA for the third quarter (Q3 2019: 30%) and 66% for the first nine months 2020 (9 months 2019: 44%).

Cash and cash equivalents increased $208 million compared to December 31, 2019 to $627 million, after spending $44 million on share repurchases in the first nine months 2020, and preemptively drawing $158 million of the Company's €350 million Revolving Credit Facility (RCF) in the second quarter.

The Company had financial liquidity in excess of $870 million, including its cash position and RCF as of September 30, 2020.

Business Outlook

The following forward-looking statements reflect Criteo's expectations as of October 28, 2020.

As of now, we continue to see a significant impact to our business related to the pandemic, continued economic uncertainty, customer demand and supply chain logistics of our clients.

Fourth quarter 2020 guidance:

  • We expect Revenue ex-TAC to be between $223 million and $230 million, implying constant-currency decline of approximately 15% at the midpoint.
    • Assumes less concentrated peak Holiday Season compared to prior years
    • Assumes continued slow rebound in our Travel and Classifieds verticals
    • Assumes $17M negative impact from Privacy headwinds in the fourth quarter
  • We expect Adjusted EBITDA to be between $81 million and $88 million.

The above guidance for the fourth quarter ending December 31, 2020, assumes the following exchange rates for the main currencies impacting our business: a U.S. dollar-euro rate of 0.882, a U.S. dollar-Japanese Yen rate of 107, a U.S. dollar-British pound rate of 0.79, a U.S. dollar-Korean Won rate of 1,196 and a U.S. dollar-Brazilian real rate of 5.23.

The above guidance assumes no acquisitions are completed during the fourth quarter 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 ("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 related and transformation costs, acquisition-related costs and deferred price consideration.

During the period, we have broadened the definition of Adjusted EBITDA to exclude costs related to restructuring and transformation costs, in addition to restructuring charges previously excluded. 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 related and transformation 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 related and transformation costs and the tax impact of these adjustments. Adjusted Net Income and Adjusted diluted EPS are key measures used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital.

In particular, we believe that by eliminating equity awards compensation expense, amortization of acquisition-related intangible assets, acquisition-related costs and deferred price consideration, restructuring related and transformation costs and the tax impact of these adjustments, Adjusted Net Income and Adjusted diluted EPS can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted Net Income and Adjusted diluted EPS provide useful information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.

Free Cash Flow is defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment. Free Cash Flow 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 related and transformation 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, 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 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 the scope and impact of the COVID-19 pandemic on our employees, operations, revenue and cash flows, uncertainty regarding our ability to access a consistent supply of internet display advertising inventory and expand access to such inventory, 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 2, 2020, and in subsequent Quarterly Reports on Form 10-Q as well as future filings and reports by the Company. Importantly, at this time, the COVID-19 pandemic is having a significant impact on Criteo's business, financial condition, cash flow and results of operations. There are significant uncertainties about the duration and the extent of the impact of the virus.

Except as required by law, the Company undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events, changes in expectations or otherwise.

Conference Call Information

Criteo's senior management team will discuss the Company's earnings and provide a strategic update on a call that will take place today, October 28, 2020, at 8:00 AM EDT, 1:00 PM CEST. 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. 2,600 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.

Contacts

Criteo Investor Relations
Edouard Lassalle, SVP, Market Relations & Capital Markets, e.lassalle@criteo.com
Clemence Vermersch, Associate, Investor Relations, c.vermersch@criteo.com

Criteo Public Relations
Jessica Meyers, Director, Public Relations, Americas, j.meyers@criteo.com

Financial information to follow

 

CRITEO S.A.
Consolidated Statement of Financial Position
(U.S. dollars in thousands, unaudited)




December 31, 2019


September 30, 2020

Assets





Current assets:





Cash and cash equivalents


$

418,763



$

626,744


 Trade receivables, net of allowances of $16.1 million and $38.3
  million at December 31, 2019 and September 30, 2020, respectively 


481,732



335,583


Income taxes


21,817



11,422


Other taxes


60,924



58,123


Other current assets


17,225



19,278


Total current assets


1,000,461



1,051,150


Property, plant and equipment, net


194,161



195,679


Intangible assets, net


86,886



78,340


Goodwill


317,100



319,595


Right of Use Asset - operating lease


142,044



120,283


Marketable securities




23,416


Non-current financial assets


21,747



20,174


Deferred tax assets


27,985



34,731


    Total non-current assets


789,923



792,218


Total assets


$

1,790,384



$

1,843,368







Liabilities and shareholders' equity





Current liabilities:





Trade payables


$

390,277



$

293,480


Contingencies


6,385



960


Income taxes


3,422



276


Financial liabilities - current portion


3,636



167,033


Lease liability - operating - current portion


45,853



48,691


Other taxes


50,099



45,998


Employee - related payables


74,781



68,709


Other current liabilities


35,886



43,299


Total current liabilities


610,339



668,446


Deferred tax liabilities


9,272



8,439


Retirement benefit obligation


8,485



10,634


Financial liabilities - non-current portion


769



44


Lease liability - operating - non-current portion


117,988



90,560


Other non-current liabilities


5,543



3,333


    Total non-current liabilities


142,057



113,010


Total liabilities


752,396



781,456


Commitments and contingencies





Shareholders' equity:





Common shares, €0.025 par value, 66,197,181 and 66,083,172 shares authorized, issued and outstanding at December 31, 2019 and September 30, 2020, respectively.


2,158



2,155


Treasury stock, 3,903,673 and 5,989,258 shares at cost as of December 31, 2019 and September 30, 2020, respectively.


(74,900)



(92,450)


Additional paid-in capital


668,389



685,841


Accumulated other comprehensive loss


(40,105)



(19,658)


Retained earnings


451,725



452,932


Equity - attributable to shareholders of Criteo S.A.


1,007,267



1,028,820


Non-controlling interests


30,721



33,092


Total equity


1,037,988



1,061,912


Total equity and liabilities


$

1,790,384



$

1,843,368


 

 

CRITEO S.A.
Consolidated Statement of Income
(U.S. dollars in thousands, except share and per share data, unaudited)




Three Months Ended




Nine Months Ended





September 30,




September 30,





2019


2020


YoY Change


2019


2020


YoY Change














Revenue


$

522,606



$

470,345



(10)

%


$

1,608,876



$

1,411,335



(12)

%














Cost of revenue













Traffic acquisition cost


(301,901)



(284,401)



(6)

%


(928,559)



(839,463)



(10)

%

Other cost of revenue


(31,101)



(34,608)



11

%


(86,205)



(102,328)



19

%














Gross profit


189,604



151,336



(20)

%


594,112



469,544



(21)

%














Operating expenses:













Research and development expenses


(41,414)



(30,954)



(25)

%


(132,006)



(99,716)



(24)

%

Sales and operations expenses


(85,985)



(83,659)



(3)

%


(277,397)



(244,414)



(12)

%

General and administrative expenses


(32,835)



(28,672)



(13)

%


(102,372)



(83,772)



(18)

%

Total Operating expenses


(160,234)



(143,285)



(11)

%


(511,775)



(427,902)



(16)

%

Income from operations


29,370



8,051



(73)

%


82,337



41,642



(49)

%

Financial expense


(900)



(491)



(45)

%


(4,228)



(1,828)



(57)

%

Income before taxes


28,470



7,560



(73)

%


78,109



39,814



(49)

%

Provision for income taxes


(7,913)



(2,267)



(71)

%


(23,614)



(11,943)



(49)

%

Net Income


$

20,557



$

5,293



(74)

%


$

54,495



$

27,871



(49)

%














Net income available to shareholders of Criteo S.A.


$

18,778



$

5,227



(72)

%


$

48,721



$

26,402



(46)

%

Net income available to non-controlling interests


$

1,779



$

66



(96)

%


$

5,774



$

1,469



(75)

%














Weighted average shares outstanding used in computing per share amounts:













Basic


64,868,545



60,080,598





64,600,869



61,059,345




Diluted


66,067,045



61,027,795





65,916,219



61,644,827

















Net income allocated to shareholders per share:













Basic


$

0.29



$

0.09



(69)

%


$

0.75



$

0.43



(43)

%

Diluted


$

0.28



$

0.09



(68)

%


$

0.74



$

0.43



(42)

%

 

 

 

CRITEO S.A.

Consolidated Statement of Cash Flows

(U.S. dollars in thousands, unaudited)




Three Months Ended




Nine Months Ended





September 30,




September 30,





2019


2020


YoY Change


2019


2020


YoY Change

Net income


$

20,557



$

5,293



(74)

%


$

54,495



$

27,871



(49)

%

Non-cash and non-operating items


18,776



39,831



NM


72,735



105,742



45

%

           - Amortization and provisions


19,455



24,680



27

%


57,381



79,631



39

%

           - Equity awards compensation expense (1)


11,165



6,803



(39)

%


36,760



22,465



(39)

%

           - Net gain or loss on disposal of non-current assets




591



NM





2,734



NM


           - Change in deferred taxes


(2,710)



(80)



(97)

%


(1,374)



(7,697)



NM


           - Change in income taxes


(9,309)



6,684



NM



(19,939)



7,411



NM


           - Other


175



1,153



NM



(93)



1,198



NM


Changes in working capital related to operating activities


3,956



6,032



52

%


36,243



7,663



(79)

%

           - (Increase) / Decrease in trade receivables


14,821



(4,177)



NM



120,164



122,529



2

%

           - Increase / (Decrease) in trade payables


(4,415)



8,494



NM



(77,895)



(95,303)



22

%

           - (Increase) / Decrease in other current assets


638



(2,762)



NM



2,150



2,288



6

%

           - Increase / (Decrease) in other current liabilities


(10,177)



6,303



NM



(4,726)



(20,145)



NM


           - Change in operating lease liabilities and right of use assets


3,089



(1,826)



NM



(3,450)



(1,706)



(51)

%

CASH FROM OPERATING ACTIVITIES


43,289



51,156



18

%


163,473



141,276



(14)

%

Acquisition of intangible assets, property, plant and equipment


(27,239)



(16,308)



(40)

%


(69,343)



(57,037)



(18)

%

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


3,295



3,410



3

%


(11,077)



13,870



NM


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


106



(3)



NM



(4,582)



(3)



(100)

%

Change in other non-current financial assets


(165)



(280)



70

%


(1,349)



(20,629)



NM


CASH USED FOR INVESTING ACTIVITIES


(24,003)



(13,181)



(45)

%


(86,351)



(63,799)



(26)

%

Proceeds from borrowings under line-of-credit agreement




3,193



NM





157,503



NM


Repayment of borrowings


(167)



(12)



(93)

%


(506)



(181)



(64)

%

Proceeds from capital increase


725



117



(84)

%


638



101



(84)

%

Repurchase of treasury stocks


(17,603)



(10,554)



(40)

%


(17,603)



(43,655)



NM


Change in other financial liabilities


(928)



(1,083)



17

%


(1,167)



(2,010)



72

%

CASH (USED FOR) FROM FINANCING ACTIVITIES


(17,973)



(8,339)



(54)

%


(18,638)



111,758



NM


Effect of exchange rates changes on cash and cash equivalents


(14,188)



18,927



NM



(13,732)



18,746



NM


Net increase (decrease) in cash and cash equivalents


(12,875)



48,563



NM



44,752



207,981



NM


Net cash and cash equivalents at beginning of period


422,053



578,181



37

%


364,426



418,763



15

%

Net cash and cash equivalents at end of period


$

409,178



$

626,744



53

%


$

409,178



$

626,744



53

%














SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION













Cash paid for taxes, net of refunds


$

(19,932)



$

4,337



NM



$

(44,927)



$

(12,229)



(73)

%

Cash paid for interest


$

(337)



$

(153)



(55)

%


$

(1,095)



$

(819)



(25)

%

 

(1) 

Share-based compensation expense according to ASC 718 Compensation - stock compensation accounted for $10.8 million and $6.5 million of equity awards compensation expense for the quarter ended September 30, 2019 and 2020, respectively, and $35.7 million and $21.4 million of equity awards compensation for the nine months ended September 30, 2019 and 2020, respectively.

 

 

CRITEO S.A.
Reconciliation of Cash from Operating Activities to Free Cash Flow
(U.S. dollars in thousands, unaudited)




Three Months Ended




Nine Months Ended





September 30,




September 30,





2019


2020


YoY Change


2019


2020


YoY Change














CASH FROM OPERATING ACTIVITIES


$

43,289



$

51,156



18

%


$

163,473



$

141,276



(14)

%

Acquisition of intangible assets, property, plant and equipment


(27,239)



(16,308)



(40)

%


(69,343)



(57,037)



(18)

%

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


3,295



3,410



3

%


(11,077)



13,870



NM


FREE CASH FLOW (1)


$

19,345



$

38,258



98

%


$

83,053



$

98,109



18

%

 

(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






Nine Months Ended








September 30,






September 30,






Region


2019


2020


YoY Change


YoY Change at Constant Currency


2019


2020


YoY Change


YoY Change at Constant Currency

Revenue


















Americas


$

213,937



$

204,618



(4)

%


(3)

%


$

645,904



$

582,037



(10)

%


(9)

%


EMEA


185,556



167,800



(10)

%


(13)

%


589,558



517,535



(12)

%


(12)

%


Asia-Pacific


123,113



97,927



(20)

%


(21)

%


373,414



311,763



(17)

%


(17)

%


Total


522,606



470,345



(10)

%


(11)

%


1,608,876



1,411,335



(12)

%


(12)

%



















Traffic acquisition costs


















Americas


(129,047)



(130,756)



1

%


3

%


(390,083)



(366,095)



(6)

%


(5)

%


EMEA


(103,899)



(97,272)



(6)

%


(10)

%


(328,591)



(295,822)



(10)

%


(9)

%


Asia-Pacific


(68,955)



(56,373)



(18)

%


(19)

%


(209,885)



(177,546)



(15)

%


(16)

%


Total


(301,901)



(284,401)



(6)

%


(7)

%


(928,559)



(839,463)



(10)

%


(9)

%



















Revenue ex-TAC (1)


















Americas


84,890



73,862



(13)

%


(11)

%


255,821



215,942



(16)

%


(14)

%


EMEA


81,657



70,528



(14)

%


(17)

%


260,967



221,713



(15)

%


(14)

%


Asia-Pacific


54,158



41,554



(23)

%


(24)

%


163,529



134,217



(18)

%


(18)

%


Total


$

220,705



$

185,944



(16)

%


(16)

%


$

680,317



$

571,872



(16)

%


(15)

%

 

(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




Nine Months Ended





September 30,




September 30,





2019


2020


YoY Change


2019


2020


YoY Change

Net income


$

20,557



$

5,293



(74)

%


$

54,495



$

27,871



(49)

%

Adjustments:













Financial expense


900



491



(45)

%


4,228



1,828



(57)

%

Provision for income taxes


7,913



2,267



(71)

%


23,614



11,943



(49)

%

Equity awards compensation expense


11,770



6,803



(42)

%


40,043



22,465



(44)

%

Research and development


3,230



3,333



3

%


11,458



7,771



(32)

%

Sales and operations


4,398



3,190



(27)

%


16,292



8,380



(49)

%

General and administrative


4,142



280



(93)

%


12,293



6,314



(49)

%

Pension service costs


388



572



47

%


1,173



1,649



41

%

Research and development


188



286



52

%


572



824



44

%

Sales and operations


71



101



42

%


214



291



36

%

General and administrative


129



185



43

%


387



534



38

%

Depreciation and amortization expense


22,388



21,752



(3)

%


62,999



66,098



5

%

Cost of revenue


12,193



14,712



21

%


32,175



40,581



26

%

Research and development (1)


4,249



1,721



(59)

%


11,260



9,029



(20)

%

Sales and operations


4,178



4,176



%


14,151



12,737



(10)

%

General and administrative


1,768



1,143



(35)

%


5,413



3,751



(31)

%

Acquisition-related costs




112



NM





112



NM


General and administrative




112



NM





112



NM


Restructuring related and transformation costs (2)


303



12,181



NM



2,921



15,606



NM


Research and development


172



1,985



NM



296



3,493



NM


Sales and operations


131



5,357



NM



2,196



6,793



NM


General and administrative




4,839



NM



429



5,320



NM


Total net adjustments


43,662



44,178



1

%


134,978



119,701



(11)

%

Adjusted EBITDA (3)


$

64,219



$

49,471



(23)

%


$

189,473



$

147,572



(22)

%

 

(1) 

For the  Nine Months Ended September 30, 2020, the Company recognized an accelerated amortization for Manage technology due to a revised useful life in 2019
($4.0 million in Research and development).

(2)

For the Three Months Ended and the Nine Months Ended September 2019, and September 2020, respectively, the Company recognized restructuring related and transformation costs following its new organizational structure implemented to support its multi-product platform strategy and office right sizing policy:

 


Three Months Ended

Nine Months Ended


September 30,

September 30,


2019


2020

2019


2020

(Gain) from forfeitures of share-based compensation awards

(606)




(3,284)




Depreciation and amortization expense




1,228




Facilities and impairment related costs



7,023


1,647



8,817


Payroll related costs

909



2,858


3,330



4,489


Consulting costs related to transformation



2,300




2,300


Total restructuring related and transformation costs

303



12,181


2,921



15,606


 

For the Three Months Ended and the Nine Months Ended September 30, 2020, the cash outflows related to restructuring related and transformation costs were $6.2 million, and $13.0 million respectively, and were mainly compromised of payroll costs, broker fees and termination penalties related to facilities.





(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 related and transformation 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 related and transformation 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




Nine Months Ended





September 30,




September 30,





2019


2020


YoY Change


2019


2020


YoY Change

Research and Development expenses


$

(41,414)



$

(30,954)



(25)

%


$

(132,006)



$

(99,716)



(24)

%

Equity awards compensation expense


3,230



3,333



3

%


11,458



7,771



(32)

%

Depreciation and Amortization expense (1)


4,249



1,721



(59)

%


11,260



9,029



(20)

%

Pension service costs


188



286



52

%


572



824



44

%

Restructuring related and transformation costs (2)


172



1,985



NM



296



3,493



NM


Non GAAP - Research and Development expenses


(33,575)



(23,629)



(30)

%


(108,420)



(78,599)



(28)

%

Sales and Operations expenses


(85,985)



(83,659)



(3)

%


(277,397)



(244,414)



(12)

%

Equity awards compensation expense


4,398



3,190



(27)

%


16,292



8,380



(49)

%

Depreciation and Amortization expense


4,178



4,176



%


14,151



12,737



(10)

%

Pension service costs


71



101



42

%


214



291



36

%

Restructuring related and transformation costs (2)


131



5,357



NM



2,196



6,793



NM


Non GAAP - Sales and Operations expenses


(77,207)



(70,835)



(8)

%


(244,544)



(216,213)



(12)

%

General and Administrative expenses


(32,835)



(28,672)



(13)

%


(102,372)



(83,772)



(18)

%

Equity awards compensation expense


4,142



280



(93)

%


12,293



6,314



(49)

%

Depreciation and Amortization expense


1,768



1,143



(35)

%


5,413



3,751



(31)

%

Pension service costs


129



185



43

%


387



534



38

%

Acquisition related costs




112



NM





112



NM


Restructuring related and transformation costs (2)




4,839



NM



429



5,320



NM


Non GAAP - General and Administrative expenses


(26,796)



(22,113)



(17)

%


(83,850)



(67,741)



(19)

%

Total Operating expenses


(160,234)



(143,285)



(11)

%


(511,775)



(427,902)



(16)

%

Equity awards compensation expense


11,770



6,803



(42)

%


40,043



22,465



(44)

%

Depreciation and Amortization expense (1)


10,195



7,040



(31)

%


30,824



25,517



(17)

%

Pension service costs


388



572



47

%


1,173



1,649



41

%

Acquisition-related costs




112



NM





112



NM


Restructuring related and transformation costs (2)


303



12,181



NM



2,921



15,606



NM


Total Non GAAP Operating expenses (3)


$

(137,578)



$

(116,577)



(15)

%


$

(436,814)



$

(362,553)



(17)

%

 

(1)

For the  Nine Months Ended September 30, 2020, the Company recognized an accelerated amortization for Manage technology due to a revised useful life in 2019 ($4.0 million in Research and development).

(2)

For the Three Months Ended and the Nine Months Ended September 2019, and September 2020, respectively, the Company recognized restructuring related and transformation costs following its new organizational structure implemented to support its multi-product platform strategy and office right sizing policy.

 


Three Months Ended

Nine Months Ended


September 30,

September 30,


2019


2020

2019


2020

(Gain) from forfeitures of share-based compensation awards

(606)




(3,284)




Depreciation and amortization expense




1,228




Facilities and impairment related costs



7,023


1,647



8,817


Payroll related costs

909



2,858


3,330



4,489


Consulting costs related to transformation



2,300




2,300


Total restructuring related and transformation costs

303



12,181


2,921



15,606


 

For the Three Months Ended and the Nine Months Ended September 30, 2020, the cash outflows related to restructuring related and transformation costs were $6.2 million, and $13.0 million respectively, and were mainly compromised of payroll costs, broker fees and termination penalties related to facilities





(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 related and transformation 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




Nine Months Ended





September 30,




September 30,





2019


2020


YoY Change


2019


2020


YoY Change

Equity awards compensation expense













Research and development


$

3,230



$

3,333



3

%


$

11,458



$

7,771



(32)

%

Sales and operations


4,398



3,190



(27)

%


16,292



8,380



(49)

%

General and administrative


4,142



280



(93)

%


12,293



6,314



(49)

%

Total equity awards compensation expense


11,770



6,803



(42)

%


40,043



22,465



(44)

%














Pension service costs













Research and development


188



286



52

%


572



824



44

%

Sales and operations


71



101



42

%


214



291



36

%

General and administrative


129



185



43

%


387



534



38

%

Total pension service costs


388



572



47

%


1,173



1,649



41

%














Depreciation and amortization expense













Cost of revenue


12,193



14,712



21

%


32,175



40,581



26

%

Research and development (1)


4,249



1,721



(59)

%


11,260



9,029



(20)

%

Sales and operations


4,178



4,176



%


14,151



12,737



(10)

%

General and administrative


1,768



1,143



(35)

%


5,413



3,751



(31)

%

Total depreciation and amortization expense


22,388



21,752



(3)

%


62,999



66,098



5

%














Acquisition-related costs













General and administrative




112



NM





112



NM


Total acquisition-related costs




112



NM





112



NM















Restructuring related and transformation costs (2)













Research and development


172



1,985



NM



296



3,493



NM


Sales and operations


131



5,357



NM



2,196



6,793



NM


General and administrative




4,839



NM



429



5,320



NM


Total restructuring related and transformation costs


$

303



$

12,181



NM



$

2,921



$

15,606



NM


 

(1)

For the  Nine Months Ended September 30, 2020, the Company recognized an accelerated amortization for Manage technology due to a revised useful life in 2019 ($4.0 million in Research and development).

(2)

For the Three Months Ended and the Nine Months Ended September 2019, and September 2020, respectively, the Company recognized restructuring related and transformation costs following its new organizational structure implemented to support its multi-product platform strategy and office right sizing policy: 

 


Three Months Ended

Nine Months Ended


September 30,

September 30,


2019


2020

2019


2020

(Gain) from forfeitures of share-based compensation awards

(606)




(3,284)




Depreciation and amortization expense




1,228




Facilities and impairment related costs



7,023


1,647



8,817


Payroll related costs

909



2,858


3,330



4,489


Consulting costs related to transformation



2,300




2,300


Total restructuring related and transformation costs

303



12,181


2,921



15,606


 

For the Three Months Ended and the Nine Months Ended September 30, 2020, the cash outflows related to restructuring related and transformation costs were $6.2 million, and
$13.0 million respectively, and were mainly compromised of payroll costs, broker fees and termination penalties related to facilities.

 

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




Nine Months Ended





September 30,




September 30,





2019


2020


YoY Change


2019


2020


YoY Change














Net income


$

20,557



$

5,293



(74)

%


$

54,495



$

27,871



(49)

%

Adjustments:













Equity awards compensation expense


11,770



6,803



(42)

%


40,043



22,465



(44)

%

Amortization of acquisition-related intangible assets (1)


5,456



2,899



(47)

%


16,393



12,594



(23)

%

Acquisition-related costs




112



NM




112



NM

Restructuring related and transformation costs (2)


303



12,181



NM


2,921



15,606



NM

Tax impact of the above adjustments


(2,640)



(2,986)



13

%


(7,971)



(5,611)



(30)

%

Total net adjustments


14,889



19,009



28

%


51,386



45,166



(12)

%

Adjusted net income (3)


$

35,446



$

24,302



(31)

%


$

105,881



$

73,037



(31)

%














Weighted average shares outstanding













 - Basic


64,868,545



60,080,598





64,600,869



61,059,345




 - Diluted


66,067,045



61,027,795





65,916,219



61,644,827

















Adjusted net income per share













 - Basic


$

0.55



$

0.40



(27)

%


$

1.64



$

1.20



(27)

%

 - Diluted


$

0.54



$

0.40



(26)

%


$

1.61



$

1.18



(27)

%

 

(1)

For the  Nine Months Ended September 30, 2020, the Company recognized an accelerated amortization for Manage technology due to a revised useful life in 2019 ($4.0 million in Research and development).

(2)

For the Three Months Ended and the Nine Months Ended September 2019, and September 2020, respectively, the Company recognized restructuring related and transformation costs  following its new organizational structure implemented to support its multi-product platform strategy and office right sizing policy:

 


Three Months Ended

Nine Months Ended


September 30,

September 30,


2019


2020

2019


2020

(Gain) from forfeitures of share-based compensation awards

(606)




(3,284)




Depreciation and amortization expense




1,228




Facilities and impairment related costs



7,023


1,647



8,817


Payroll related costs

909



2,858


3,330



4,489


Consulting costs related to transformation



2,300




2,300


Total restructuring related and transformation costs

303



12,181


2,921



15,606


 

For the Three Months Ended and the Nine Months Ended September 30, 2020, the cash outflows related to restructuring related and transformation costs were $6.2 million, and $13.0 million respectively, and were mainly compromised of payroll costs, broker fees and termination penalties related to facilities.





(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 related and transformation 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 related and transformation costs and the tax impact of the foregoing adjustments in calculating Adjusted Net Income can provide a useful measure for period-to-period comparisons of our business. Accordingly, we believe that Adjusted Net Income provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Adjusted Net Income has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) Adjusted Net Income does not reflect the potentially dilutive impact of equity-based compensation or the impact of certain acquisition related costs; and (b) other companies, including companies in our industry, may calculate Adjusted Net Income or similarly titled measures differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Adjusted Net Income alongside our other U.S. GAAP-based financial results, including net income.

 

 

CRITEO S.A.
Constant Currency Reconciliation
(U.S. dollars in thousands, unaudited)




Three Months Ended




Nine Months Ended





September 30,




September 30,





2019


2020


YoY Change


2019


2020


YoY Change














Revenue as reported


$

522,606



$

470,345



(10)

%


$

1,608,876



$

1,411,335



(12)

%

Conversion impact U.S. dollar/other currencies




(3,800)







11,732




Revenue at constant currency(1)


522,606



466,545



(11)

%


1,608,876



1,423,067



(12)

%














Traffic acquisition costs as reported


(301,901)



(284,401)



(6)

%


(928,559)



(839,463)



(10)

%

Conversion impact U.S. dollar/other currencies




2,183







(6,473)




Traffic Acquisition Costs at constant currency(1)


(301,901)



(282,218)



(7)

%


(928,559)



(845,936)



(9)

%














Revenue ex-TAC as reported(2)


220,705



185,944



(16)

%


680,317



571,872



(16)

%

Conversion impact U.S. dollar/other currencies




(1,617)







5,259




Revenue ex-TAC at constant currency(2)


220,705



184,327



(16)

%


680,317



577,131



(15)

%

Revenue ex-TAC(2)/Revenue as reported


42

%


40

%




42

%


41

%
















Other cost of revenue as reported


(31,101)



(34,608)



11

%


(86,205)



(102,328)



19

%

Conversion impact U.S. dollar/other currencies




(303)







(1,271)




Other cost of revenue at constant currency(1)


(31,101)



(34,911)



12

%


(86,205)



(103,599)



20

%














Adjusted EBITDA(3)


64,219



49,471



(23)

%


189,473



147,572



(22)

%

Conversion impact U.S. dollar/other currencies




(2,399)







(182)




Adjusted EBITDA(3) at constant currency(1)


$

64,219



$

47,072



(27)

%


$

189,473



$

147,390



(22)

%

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


29

%


27

%




28

%


26

%



 

(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)




Nine Months Ended



September 30,



2019



2020


Shares outstanding as at January 1,


64,249,084



62,293,508


Weighted average number of shares issued during the period


351,785



(1,234,163)


Basic number of shares - Basic EPS basis


64,600,869



61,059,345


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


1,315,350



585,482


Diluted number of shares - Diluted EPS basis


65,916,219



61,644,827







Shares issued as at September 30, before Treasury stocks


66,173,983



66,083,172


Treasury stock as of September 30,


(1,807,251)



(5,989,258)


Shares outstanding as of September 30, after Treasury stocks


64,366,732



60,093,914


Total dilutive effect of share options, warrants, employee warrants


8,494,732



7,581,847


Fully diluted shares as at September 30,


72,861,464



67,675,761


 

 

CRITEO S.A.
Supplemental Financial Information and Operating Metrics
(U.S. dollars in thousands except where stated, unaudited)



Q3
2018

Q4
2018

Q1
2019

Q2
2019

Q3
2019

Q4
2019

Q1
2020

Q2
2020

Q3
2020

YoY
Change

QoQ Change















Clients

19,213

19,419

19,373

19,733

19,971

20,247

20,360

20,359

20,565

3%

1%















Revenue 

528,869

670,096

558,123

528,147

522,606

652,640

503,376

437,614

470,345

(10)%

7%


Americas

211,247

317,350

217,993

213,974

213,937

306,250

191,745

185,674

204,618

(4)%

10%


EMEA

195,230

220,904

209,643

194,359

185,556

216,639

190,114

159,621

167,800

(10)%

5%


APAC

122,392

131,842

130,487

119,814

123,113

129,751

121,517

92,319

97,927

(20)%

6%















TAC

(305,387)

(398,238)

(322,429)

(304,229)

(301,901)

(386,388)

(297,364)

(257,698)

(284,401)

(6)%

10%


Americas

(126,406)

(196,168)

(131,545)

(129,491)

(129,047)

(189,092)

(120,022)

(115,317)

(130,756)

1%

13%


EMEA

(111,131)

(128,053)

(117,291)

(107,401)

(103,899)

(124,939)

(108,397)

(90,153)

(97,272)

(6)%

8%


APAC

(67,850)

(74,017)

(73,593)

(67,337)

(68,955)

(72,357)

(68,945)

(52,228)

(56,373)

(18)%

8%















Revenue ex-TAC (1)

223,482

271,858

235,694

223,918

220,705

266,252

206,012

179,916

185,944

(16)%

3%


Americas

84,841

121,182

86,448

84,483

84,890

117,158

71,723

70,357

73,862

(13)%

5%


EMEA

84,099

92,851

92,352

86,958

81,657

91,700

81,717

69,468

70,528

(14)%

2%


APAC

54,542

57,825

56,894

52,477

54,158

57,394

52,572

40,091

41,554

(23)%

4%















Cash flow from operating activities 

50,256

85,600

67,220

52,964

43,289

59,359

56,743

33,377

51,156

18%

53%















Capital expenditures

29,656

45,408

23,684

32,792

23,944

17,520

11,737

18,532

12,898

(46)%

(30)%















Capital expenditures/Revenue

6%

7%

4%

6%

5%

3%

2%

4%

3%

N.A

N.A















Net cash position

458,690

364,426

395,771

422,053

409,178

418,763

436,506

578,181

626,744

53%

8%















Headcount

2,737

2,744

2,813

2,873

2,794

2,755

2,701

2,685

2,636

(6)%

(2)%















Days Sales
Outstanding (days -
end of month)

60

58

59

58

57

52

62

61

62

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-third-quarter-2020-financial-results-301161524.html

SOURCE Criteo S.A.

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