NEW YORK, April 1, 2020 /PRNewswire/ -- Criteo S.A.
(NASDAQ: CRTO), the global technology company powering the world's
marketers with trusted and impactful advertising, today provides an
update to its financial outlook for the first quarter 2020 and
comments on its financial liquidity in the context of the global
economic turmoil triggered by the COVID-19 pandemic. Criteo has
also determined to withdraw its previously issued financial
guidance for fiscal year 2020 due to the growing impact of COVID-19
on the global operating and economic environment.
Criteo's top priority since the start of the outbreak has been
the health and safety of its employees worldwide. The Company has
therefore implemented early on a work-from-home policy for all
staff and has closed all offices globally beyond what is required
by local authorities. At the same time, the Company has implemented
a business continuity plan, including for its data centers, client
support and internal processes, to ensure all of its operations
remain on a solid footing.
"We are entirely focused on executing on our strategic and
operating priorities," said Megan
Clarken, CEO. "Our solid financial model and strong
liquidity give us confidence. We remain true to our mission of
powering the world's marketers with trusted and impactful
advertising."
Given the ongoing impact that COVID-19 is having on the
Company's clients' business, in particular in the Travel and
Classifieds verticals, the Company does not expect to meet the
Revenue ex-TAC1 guidance for the first quarter 2020
it provided on February 11, 2020.
This guidance was based on the information the Company had at the
time and did not include any assumed impact from COVID-19. Since
that date, the circumstances of the COVID-19 outbreak have changed
materially and rapidly.
As a result, Criteo now expects Revenue ex-TAC for the
first quarter 2020 in the range of $204 million to
$206 million, after a direct
impact from COVID-19 on its business of approximately $9 to $10 million,
as compared to the Q1 2020 guidance provided on February 11, 2020 of $209
million to $212 million. For
Adjusted EBITDA1 in the first quarter 2020, Criteo now
expects a range of $59 million to
$61 million, above the Q1
2020 guidance provided in February of $55
million to $58 million. And,
the Company expects a Free Cash-Flow1 range for Q1 2020
of $37 million to $40 million before foreign currency impacts.
In addition, given the fluid situation and the many unknowns at
this point, the Company is currently not yet in a position to
reliably quantify the impact of COVID-19 on its financial results
for the remainder of 2020. As a result, the Company is withdrawing
its previously issued financial guidance for fiscal year 2020 and
expects to discuss its future outlook at the time of its earnings
call for the first quarter 2020.
As illustrated by our expected results for the first quarter,
Criteo's management team is focused on managing the expense base in
a swift, agile and disciplined way to maximize profitability and
preserve cash generation for 2020. The Company has already frozen
all hiring and travel expenses globally, and is taking several
additional cost containment measures, including reductions in
hosting costs, marketing spend, third-party services, internal
events and others, beyond what was already included in its fiscal
year 2020 guidance provided in February. In addition, Criteo's
management team will be very thoughtful about its use of cash for
the remainder of 2020, and intends to focus primarily on building
and partnering to execute on its strategic roadmap.
As of March 31, 2020, the Company
had a net cash position of $431
million, before closing adjustments and after financial debt
of only $2 million. In addition, the
Company maintains a €350 million Revolving Credit Facility that has
not been drawn upon to date. The Company believes that its current
liquidity position, combined with its expected cash-flow generation
for the year, puts it in a solid position to weather the COVID-19
crisis under multiple scenarios.
Non-GAAP Financial Measures
This press release includes the following financial measures
defined as non-GAAP financial measures by the U.S. Securities and
Exchange Commission (the "SEC"): Revenue ex-TAC, Adjusted EBITDA
and Free Cash Flow. 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.
Revenue ex-TAC, is a key measure 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 provides
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.
Adjusted EBITDA 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‑ 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 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 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.
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,
Adjusted EBITDA and Free Cash Flow or similarly titled measures but
calculate them differently, 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 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 respond to changes in technology,
uncertainty regarding the scope and impact of the recent outbreak
of the coronavirus referred to as COVID-19 on our 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, 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, 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.
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.
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1 Revenue ex-TAC, Adjusted EBITDA and
Free Cash Flow are not measures calculated in accordance with U.S.
GAAP.
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SOURCE Criteo S.A.