NEW YORK, April 29, 2020 /PRNewswire/ -- Criteo S.A.
(NASDAQ: CRTO), the global technology company powering the world's
marketers with trusted and impactful advertising, today announced
solid financial results for the first quarter ended March
31, 2020 in a challenging global environment marked by the
outbreak of COVID-19.
- Revenue decreased 10% year-over-year, or 8% at constant
currency1, to $503
million.
- Revenue excluding Traffic Acquisition Costs, or Revenue
ex-TAC2, decreased 13% year-over-year, or 11% at
constant currency, to $206 million
($207 million at guidance rates),
representing 41% of revenue.
- The COVID-19 outbreak negatively impacted Revenue by
approximately $24 million, or
approximately 4 points of year-over-year growth at constant
currency, and negatively impacted Revenue ex-TAC by approximately
$10 million, or approximately 4
points of year-over-year growth at constant currency.
- Net income decreased 23% year-over-year to $16 million, representing 3% of revenue.
- Adjusted EBITDA2 decreased 12% at constant currency
to $59 million ($60 million at guidance rates), representing 29%
of Revenue ex-TAC.
- Diluted EPS decreased 14% to $0.25 and Adjusted diluted EPS2
decreased 13% to $0.52.
- Cash flow from operating activities was $57 million.
- Free Cash Flow2 was solid and increased 3% to
$45 million.
- Our cash position was $437
million as of March 31, 2020,
up $18 million compared to
Dec. 31, 2019.
- The Company's Board of directors authorized a new share
repurchase program of up to $30
million.
- The Company had financial liquidity in excess of $820 million as of March
31, 2020.
"Our people safety, operations, client relationships and cost
control are our key priorities in this context," said Megan Clarken, CEO. "We believe our core
strength in direct response marketing will help our customers best
rebound from these unusual times."
"Q1 was a solid quarter amidst a challenging environment," said
Benoit Fouilland, CFO. "We're hyper-focused on managing our cost
base and protecting our profitability and financial liquidity."
Operating Highlights
- New solutions, which include all solutions outside of
retargeting, grew 49% year-over-year to 13% of total Revenue
ex-TAC, an increase of 4 points year-over-year.
- We added over 110 net new clients and maintained high client
retention at close to 90% for all solutions.
- Same-client revenue declined 9% year-over-year and same-client
Revenue ex-TAC3 decreased 9% year-over-year at constant
currency, including 5 points directly attributable to the COVID-19
disruption.
- Our direct header-bidding technology now connects to over 4,600
publishers across Web and App, and we now reach about 40% of all
our publishers via Criteo Direct Bidder.
- We launched Criteo Partners, our global partnership program for
reseller agencies.
Revenue and Revenue ex-TAC
Revenue declined 10% year-over-year, or 8% at constant currency,
to $503 million (Q1 2019: $558 million), after an
approximately $24 million business
impact from the COVID-19 outbreak, or approximately 4 points of the
year-over-over decline at constant currency. Revenue ex-TAC
decreased 13% year-over-year, or 11% at constant currency, to
$206 million (Q1 2019: $236 million), after an
approximately $10 million business
impact from the COVID-19 outbreak, or approximately 4 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 large client business. Revenue ex-TAC
as a percentage of revenue, or Revenue ex-TAC margin, was 41% (Q1
2019: 42%).
- In the Americas, Revenue declined 12% year-over-year, or 11% at
constant currency, to $192 million
and represented 38% of total Revenue. Revenue ex-TAC declined 17%
year-over-year, or 16% at constant currency, to $72 million and represented 35% of total Revenue
ex-TAC.
- In EMEA, Revenue declined 9% year-over-year, or 7% at constant
currency, to $190 million and
represented 38% of total Revenue. Revenue ex-TAC declined 12%
year-over-year, or 9% at constant currency, to $82 million and represented 40% of total Revenue
ex-TAC.
- In Asia-Pacific, Revenue
declined 7% year-over-year, or 6% at constant currency, to
$122 million and represented 24% of
total Revenue. Revenue ex-TAC declined 8% year-over-year, or 7% at
constant currency, to $53 million and
represented 25% of total Revenue ex-TAC.
Net Income and Adjusted Net Income
Net income decreased 23% year-over-year to $16 million
(Q1 2019: $21 million). Net income margin as a percentage
of revenue was 3% (Q1 2019: 4%). Net income available to
shareholders of Criteo S.A. decreased 19% year-over-year to
$15 million, or $0.25 per share
on a diluted basis (Q1 2019: $19 million, or $0.29 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, decreased 19% year-over-year to
$32 million, or $0.52 per share
on a diluted basis (Q1 2019: $40 million, or $0.60 per share on a diluted basis).
Adjusted EBITDA and Operating Expenses
Adjusted EBITDA decreased 14% year-over-year, or 12% at constant
currency, to $59 million (Q1 2019:
$69 million), driven by the Revenue ex-TAC performance
over the period, including the impact of the COVID-19 outbreak,
partly offset by our proactive and disciplined expense management.
Adjusted EBITDA as a percentage of Revenue ex-TAC, or Adjusted
EBITDA margin, was 29% (Q1 2019: 29%).
Operating expenses decreased 16% to $148 million
(Q1 2019: $176 million), mostly driven by lower
headcount-related expense and disciplined expense management.
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 16% to $126 million
(Q1 2019: $150 million), mostly
driven by lower headcount-related expense and disciplined expense
management.
Since the outbreak of COVID-19, the Company has been focused on
managing its expense base in a swift, agile and disciplined way to
maximize profitability and preserve cash generation for 2020. We
have already frozen substantially all hiring and travel expenses
globally and have taken several additional cost containment
measures, including reductions in marketing spend and events,
third-party services, hosting costs and others, beyond the savings
that were already included in our fiscal year 2020 guidance
provided on February 11, 2020.
Cash Flow, Cash and Financial Liquidity
Position
Cash flow from operating activities decreased 16% year-over-year
to $57 million (Q1 2019: $67 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, was solid in the current
circumstances and increased 3% year-over-year to $45 million
(Q1 2019: $44 million), representing 76% of Adjusted
EBITDA (Q1 2019: 63%), despite $4
million cash restructuring charges.
Cash and cash equivalents increased $18
million compared to December 31,
2019 to $437 million, after spending $18 million on share repurchases in the quarter.
The Company completed its second share-buyback program in
February 2020, for 4.5 million shares
and approximately $77 million.
The Company has immediate access to a €350 million Revolving
Credit Facility, which, combined with its cash position as of
March 31, 2020, provides total
liquidity of approximately $820
million. Overall, we believe that our current financial
liquidity, combined with our expected cash-flow generation in 2020,
puts us in a strong position to weather the COVID-19 crisis under
multiple scenarios.
Business Outlook
The following forward-looking statements reflect Criteo's
expectations as of April 29,
2020.
Based on our current forecasting framework for the impact of
COVID-19 on our business, we currently assume that the second
quarter 2020 will be the through quarter in our central COVID-19
scenario.
Second quarter 2020 guidance:
- We expect Revenue ex-TAC to be between $140 million and $147
million, implying constant-currency decline of approximately
32% to 35%.
- Due to the expected significant impact of COVID-19 on our
business in the second quarter, we expect Adjusted EBITDA to be
between $0 million and $7 million.
We withdrew our financial guidance for fiscal year 2020 on
April 1, 2020. Given how fluid the
global situation still is around the consequences of the COVID-19
outbreak and the many unknowns at this point, we believe the
Company is currently not yet in a position to reliably quantify the
impact of COVID-19 on its financial results beyond the second
quarter 2020. We will therefore not provide guidance for Revenue
ex-TAC and Adjusted EBITDA for fiscal year 2020 until further
notice.
The above guidance for the second quarter ending June 30, 2020, assumes the following exchange
rates for the main currencies impacting our business: a U.S.
dollar-euro rate of 0.902, a U.S. dollar-Japanese Yen rate of
109.7, a U.S. dollar-British pound rate of 0.803, a U.S.
dollar-Korean Won rate of 1,224.5 and a U.S. dollar-Brazilian real
rate of 5.05.
The above guidance assumes no acquisitions are completed during
the second quarter ending June 30, 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.
Announcement of a Share Repurchase Program of up to
$30 million
Demonstrating the Company's confidence in its business and its
ability to generate cash flow, and to meet its equity obligations
to employees while taking advantage of the attractive level of its
share price, Criteo today announces that the Board of Directors has
authorized a share repurchase program of up to $30 million of the Company's outstanding American
Depositary Shares.
This program relies primarily upon the authorization provided
under L. 225-208 of the French Commercial Code, and as such the
Company intends to use repurchased shares under this new program to
satisfy employee equity obligations in lieu of issuing new shares,
which would limit future dilution for its employee equity program.
If a new authorization under L. 225-209-2 of the French Commercial
Code is granted by the Company's shareholders at the Company's 2020
Annual General Meeting, the program could alternatively rely on the
new authorization, provided the conditions provided therein notably
relating to stock price are met, and could be used either to
satisfy employee equity plan vesting in lieu of issuing new shares,
or in connection with M&A transactions.
Under the terms of the approved program, the stock purchases may
be made from time to time on the NASDAQ Global Select Market in
compliance with applicable state and federal securities laws
(including the requirements of SEC Rule 10b-18) and applicable provisions of French
corporate law. The timing and amounts of any purchases will be
based on market conditions and other factors including price,
regulatory requirements and capital availability, as determined by
Criteo's management team and within the limits set by the
shareholders' authorization. The program does not require the
purchase of any minimum number of shares and may be suspended,
modified or discontinued at any time without prior notice.
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.
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,
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 June
30, 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 recent outbreak of COVID-19 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 earnings conference call will take place today,
April 29, 2020, at
8:00 AM EDT, 2:00 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. 2,700
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 2019 average exchange
rates for the relevant period to 2020 figures.
|
2 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.
|
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 Investor and
Analyst 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,
2019
|
|
March 31,
2020
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
418,763
|
|
|
$
|
436,506
|
|
Trade
receivables, net of allowances of $16.1 million and $23.1 million
at December 31, 2019 and March 31, 2020,
respectively
|
|
481,732
|
|
|
364,440
|
|
Income
taxes
|
|
21,817
|
|
|
23,101
|
|
Other taxes
|
|
60,924
|
|
|
65,293
|
|
Other current
assets
|
|
17,225
|
|
|
19,832
|
|
Total current
assets
|
|
1,000,461
|
|
|
909,172
|
|
Property, plant and
equipment, net
|
|
194,161
|
|
|
181,848
|
|
Intangible assets,
net
|
|
86,886
|
|
|
79,818
|
|
Goodwill
|
|
317,100
|
|
|
315,266
|
|
Right of Use Asset -
operating lease
|
|
142,044
|
|
|
139,954
|
|
Non-current financial
assets
|
|
21,747
|
|
|
20,373
|
|
Deferred tax
assets
|
|
27,985
|
|
|
29,458
|
|
Total non-current assets
|
|
789,923
|
|
|
766,717
|
|
Total
assets
|
|
$
|
1,790,384
|
|
|
$
|
1,675,889
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Trade
payables
|
|
$
|
390,277
|
|
|
$
|
300,315
|
|
Contingencies
|
|
6,385
|
|
|
6,020
|
|
Income
taxes
|
|
3,422
|
|
|
3,013
|
|
Financial liabilities
- current portion
|
|
3,636
|
|
|
2,303
|
|
Lease liability -
operating - current portion
|
|
45,853
|
|
|
47,288
|
|
Other taxes
|
|
50,099
|
|
|
49,159
|
|
Employee - related
payables
|
|
74,781
|
|
|
73,251
|
|
Other current
liabilities
|
|
35,886
|
|
|
35,709
|
|
Total current
liabilities
|
|
610,339
|
|
|
517,058
|
|
Deferred tax
liabilities
|
|
9,272
|
|
|
7,922
|
|
Retirement benefit
obligation
|
|
8,485
|
|
|
7,111
|
|
Financial liabilities
- non current portion
|
|
769
|
|
|
555
|
|
Lease liability -
operating - non current portion
|
|
117,988
|
|
|
113,920
|
|
Other non-current
liabilities
|
|
5,543
|
|
|
2,715
|
|
Total non-current liabilities
|
|
142,057
|
|
|
132,223
|
|
Total
liabilities
|
|
752,396
|
|
|
649,281
|
|
Commitments and
contingencies
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Common shares,
€0.025 par value, 66,197,181 and 66,202,881 shares authorized,
issued and outstanding at December 31, 2019 and March 31, 2020,
respectively.
|
|
2,158
|
|
|
2,158
|
|
Treasury stock,
3,903,673 and 4,533,650 shares at cost as of December 31, 2019 and
March 31, 2020, respectively.
|
|
(74,900)
|
|
|
(79,834)
|
|
Additional paid-in
capital
|
|
668,389
|
|
|
676,510
|
|
Accumulated other
comprehensive (loss)
|
|
(40,105)
|
|
|
(54,283)
|
|
Retained
earnings
|
|
451,725
|
|
|
450,480
|
|
Equity - attributable
to shareholders of Criteo S.A.
|
|
1,007,267
|
|
|
995,031
|
|
Non-controlling
interests
|
|
30,721
|
|
|
31,577
|
|
Total
equity
|
|
1,037,988
|
|
|
1,026,608
|
|
Total equity and
liabilities
|
|
$
|
1,790,384
|
|
|
$
|
1,675,889
|
|
CRITEO
S.A.
Consolidated
Statement of Income
(U.S. dollars in
thousands, except share and per share data,
unaudited)
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
2019
|
|
2020
|
|
YoY
Change
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
558,123
|
|
|
$
|
503,376
|
|
|
(10)
|
%
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
|
|
|
|
|
|
Traffic acquisition
cost
|
|
(322,429)
|
|
|
(297,364)
|
|
|
(8)
|
%
|
|
Other cost of
revenue
|
|
(26,045)
|
|
|
(33,806)
|
|
|
30
|
%
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
209,649
|
|
|
172,206
|
|
|
(18)
|
%
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development expenses
|
|
(46,577)
|
|
|
(37,515)
|
|
|
(19)
|
%
|
|
Sales and operations
expenses
|
|
(95,909)
|
|
|
(84,974)
|
|
|
(11)
|
%
|
|
General and
administrative expenses
|
|
(33,770)
|
|
|
(25,915)
|
|
|
(23)
|
%
|
|
Total Operating
expenses
|
|
(176,256)
|
|
|
(148,404)
|
|
|
(16)
|
%
|
|
Income from
operations
|
|
33,393
|
|
|
23,802
|
|
|
(29)
|
%
|
|
Financial income
(expense)
|
|
(1,974)
|
|
|
(334)
|
|
|
(83)
|
%
|
|
Income before
taxes
|
|
31,419
|
|
|
23,468
|
|
|
(25)
|
%
|
|
Provision for income
taxes
|
|
(10,018)
|
|
|
(7,040)
|
|
|
(30)
|
%
|
|
Net Income
|
|
$
|
21,401
|
|
|
$
|
16,428
|
|
|
(23)
|
%
|
|
|
|
|
|
|
|
|
|
Net income available
to shareholders of Criteo S.A.
|
|
$
|
19,120
|
|
|
$
|
15,459
|
|
|
(19)
|
%
|
|
Net income available
to non-controlling interests
|
|
$
|
2,281
|
|
|
$
|
969
|
|
|
(58)
|
%
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding used in computing per share amounts:
|
|
|
|
|
|
|
|
Basic
|
|
64,336,777
|
|
|
61,691,001
|
|
|
|
|
Diluted
|
|
66,041,296
|
|
|
62,125,582
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income allocated
to shareholders per share:
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.30
|
|
|
$
|
0.25
|
|
|
(17)
|
%
|
|
Diluted
|
|
$
|
0.29
|
|
|
$
|
0.25
|
|
|
(14)
|
%
|
|
CRITEO
S.A.
Consolidated
Statement of Cash Flows
(U.S. dollars in
thousands, unaudited)
|
|
|
|
Three Months
Ended
|
|
|
|
|
March
31,
|
|
|
|
|
2019
|
|
2020
|
|
YoY
Change
|
Net income
|
|
$
|
21,401
|
|
|
$
|
16,428
|
|
|
(23)
|
%
|
Non-cash and
non-operating items
|
|
24,998
|
|
|
32,828
|
|
|
31
|
%
|
- Amortization and provisions
|
|
19,644
|
|
|
27,044
|
|
|
38
|
%
|
- Equity awards compensation expense (1)
|
|
13,882
|
|
|
8,502
|
|
|
(39)
|
%
|
- Net gain or loss on disposal of non-current assets
|
|
—
|
|
|
2,266
|
|
|
NM
|
|
- Change in deferred taxes
|
|
(5,916)
|
|
|
(2,678)
|
|
|
(55)
|
%
|
- Change in income taxes
|
|
(1,934)
|
|
|
(2,329)
|
|
|
20
|
%
|
- Other
|
|
(678)
|
|
|
23
|
|
|
NM
|
|
Changes in working
capital related to operating activities
|
|
20,821
|
|
|
7,487
|
|
|
(64)
|
%
|
- Decrease in trade receivables
|
|
86,018
|
|
|
99,388
|
|
|
16
|
%
|
- (Decrease) in trade payables
|
|
(58,485)
|
|
|
(81,679)
|
|
|
40
|
%
|
- (Increase) in other current assets
|
|
(5,992)
|
|
|
(10,398)
|
|
|
74
|
%
|
- Increase/(Decrease) in other current liabilities
|
|
2,436
|
|
|
(945)
|
|
|
NM
|
|
- Change in operating lease liabilities and right of use
assets
|
|
(3,156)
|
|
|
1,121
|
|
|
NM
|
|
CASH FROM OPERATING
ACTIVITIES
|
|
67,220
|
|
|
56,743
|
|
|
(16)
|
%
|
Acquisition of
intangible assets, property, plant and equipment
|
|
(13,292)
|
|
|
(11,258)
|
|
|
(15)
|
%
|
Change in accounts
payable related to intangible assets, property, plant and
equipment
|
|
(10,392)
|
|
|
(479)
|
|
|
(95)
|
%
|
(Payment for)
disposal of a business, net of cash acquired (disposed)
|
|
(5,325)
|
|
|
—
|
|
|
NM
|
|
Change in other
non-current financial assets
|
|
(32)
|
|
|
889
|
|
|
NM
|
|
CASH USED FOR
INVESTING ACTIVITIES
|
|
(29,041)
|
|
|
(10,848)
|
|
|
(63)
|
%
|
Repayment of
borrowings
|
|
(172)
|
|
|
(170)
|
|
|
(1)
|
%
|
Proceeds from capital
increase
|
|
11
|
|
|
4
|
|
|
(64)
|
%
|
Change in treasury
stock
|
|
—
|
|
|
(18,241)
|
|
|
NM
|
|
Change in other
financial liabilities
|
|
(30)
|
|
|
(354)
|
|
|
NM
|
|
CASH USED FOR
FINANCING ACTIVITIES
|
|
(191)
|
|
|
(18,761)
|
|
|
NM
|
|
Effect of exchange
rates changes on cash and cash equivalents
|
|
(6,643)
|
|
|
(9,391)
|
|
|
41
|
%
|
Net increase
(decrease) in cash and cash equivalents
|
|
31,345
|
|
|
17,743
|
|
|
(43)
|
%
|
Net cash and cash
equivalents at beginning of period
|
|
364,426
|
|
|
418,763
|
|
|
15
|
%
|
Net cash and cash
equivalents at end of period
|
|
$
|
395,771
|
|
|
$
|
436,506
|
|
|
10
|
%
|
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION
|
|
|
|
|
|
|
Cash paid for taxes,
net of refunds
|
|
$
|
(17,868)
|
|
|
$
|
(12,047)
|
|
|
(33)
|
%
|
Cash paid for
interest, net of amounts capitalized
|
|
$
|
(407)
|
|
|
$
|
(349)
|
|
|
(14)
|
%
|
|
(1) Share-based compensation expense
according to ASC 718 Compensation - stock compensation accounted
for $13.5 million and $8.1 million of equity awards compensation
expense for the quarter ended March 31, 2019 and 2020.
|
CRITEO
S.A.
Reconciliation of
Cash from Operating Activities to Free Cash Flow
(U.S. dollars in
thousands, unaudited)
|
|
|
|
Three Months
Ended
|
|
|
|
|
March
31,
|
|
|
|
|
2019
|
|
2020
|
|
YoY
Change
|
|
|
|
|
|
|
|
CASH FROM OPERATING
ACTIVITIES
|
|
$
|
67,220
|
|
|
$
|
56,743
|
|
|
(16)
|
%
|
Acquisition of
intangible assets, property, plant and equipment
|
|
(13,292)
|
|
|
(11,258)
|
|
|
(15)
|
%
|
Change in accounts
payable related to intangible assets, property, plant and
equipment
|
|
(10,392)
|
|
|
(479)
|
|
|
(95)
|
%
|
FREE CASH FLOW
(1)
|
|
$
|
43,536
|
|
|
$
|
45,006
|
|
|
3
|
%
|
|
(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
|
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
Region
|
|
2019
|
|
2020
|
|
YoY
Change
|
|
YoY Change at
Constant
Currency
|
Revenue
|
|
|
|
|
|
|
|
|
|
Americas
|
|
$
|
217,993
|
|
|
$
|
191,745
|
|
|
(12)
|
%
|
|
(11)
|
%
|
|
EMEA
|
|
209,643
|
|
|
190,114
|
|
|
(9)
|
%
|
|
(7)
|
%
|
|
Asia-Pacific
|
|
130,487
|
|
|
121,517
|
|
|
(7)
|
%
|
|
(6)
|
%
|
|
Total
|
|
558,123
|
|
|
503,376
|
|
|
(10)
|
%
|
|
(8)
|
%
|
|
|
|
|
|
|
|
|
|
|
Traffic acquisition
costs
|
|
|
|
|
|
|
|
|
|
Americas
|
|
(131,545)
|
|
|
(120,022)
|
|
|
(9)
|
%
|
|
(8)
|
%
|
|
EMEA
|
|
(117,291)
|
|
|
(108,397)
|
|
|
(8)
|
%
|
|
(5)
|
%
|
|
Asia-Pacific
|
|
(73,593)
|
|
|
(68,945)
|
|
|
(6)
|
%
|
|
(6)
|
%
|
|
Total
|
|
(322,429)
|
|
|
(297,364)
|
|
|
(8)
|
%
|
|
(6)
|
%
|
|
|
|
|
|
|
|
|
|
|
Revenue ex-TAC
(1)
|
|
|
|
|
|
|
|
|
|
Americas
|
|
86,448
|
|
|
71,723
|
|
|
(17)
|
%
|
|
(16)
|
%
|
|
EMEA
|
|
92,352
|
|
|
81,717
|
|
|
(12)
|
%
|
|
(9)
|
%
|
|
Asia-Pacific
|
|
56,894
|
|
|
52,572
|
|
|
(8)
|
%
|
|
(7)
|
%
|
|
Total
|
|
$
|
235,694
|
|
|
$
|
206,012
|
|
|
(13)
|
%
|
|
(11)
|
%
|
|
(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
|
|
|
|
|
March
31,
|
|
|
|
|
2019
|
|
2020
|
|
YoY
Change
|
Net income
|
|
$
|
21,401
|
|
|
$
|
16,428
|
|
|
(23)
|
%
|
Adjustments:
|
|
|
|
|
|
|
Financial (income)
expense
|
|
1,974
|
|
|
334
|
|
|
(83)
|
%
|
Provision for income
taxes
|
|
10,018
|
|
|
7,040
|
|
|
(30)
|
%
|
Equity awards
compensation expense
|
|
13,882
|
|
|
8,503
|
|
|
(39)
|
%
|
Research and
development
|
|
4,025
|
|
|
2,370
|
|
|
(41)
|
%
|
Sales and
operations
|
|
6,201
|
|
|
3,618
|
|
|
(42)
|
%
|
General and
administrative
|
|
3,656
|
|
|
2,515
|
|
|
(31)
|
%
|
Pension service
costs
|
|
394
|
|
|
538
|
|
|
37
|
%
|
Research and
development
|
|
193
|
|
|
269
|
|
|
39
|
%
|
Sales and
operations
|
|
72
|
|
|
95
|
|
|
32
|
%
|
General and
administrative
|
|
129
|
|
|
174
|
|
|
35
|
%
|
Depreciation and
amortization expense
|
|
19,296
|
|
|
24,138
|
|
|
25
|
%
|
Cost of
revenue
|
|
9,135
|
|
|
12,771
|
|
|
40
|
%
|
Research and
development (1)
|
|
3,477
|
|
|
5,650
|
|
|
62
|
%
|
Sales and
operations
|
|
4,864
|
|
|
4,340
|
|
|
(11)
|
%
|
General and
administrative
|
|
1,820
|
|
|
1,377
|
|
|
(24)
|
%
|
Restructuring cost
(2)
|
|
1,890
|
|
|
2,209
|
|
|
17
|
%
|
Cost of
revenue
|
|
—
|
|
|
—
|
|
|
—
|
|
Research and
development
|
|
—
|
|
|
995
|
|
|
NM
|
Sales and
operations
|
|
1,890
|
|
|
1,021
|
|
|
(46)
|
%
|
General and
administrative
|
|
—
|
|
|
193
|
|
|
NM
|
Total net
adjustments
|
|
47,454
|
|
|
42,762
|
|
|
(10)
|
%
|
Adjusted EBITDA
(3)
|
|
$
|
68,855
|
|
|
$
|
59,190
|
|
|
(14)
|
%
|
|
(1) For the Three Months Ended
March 31, 2020, the Company recognized an accelerated amortization
for Manage technology due to a revised useful life in
2019 ($3.3 million in Research and development).
|
|
(2) For
the Three Months Ended March 31, 2020, the Company recognized
restructuring charges following its new organizational structure
implemented to support its multi-product platform strategy and
office right sizing policy, respectively, initiated at the end
of the fiscal year ended December 31, 2019 as detailed
below:
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2019
|
|
2020
|
Depreciation and
amortization expense
|
1,143
|
|
|
—
|
|
Facilities and
impairment related costs
|
747
|
|
|
987
|
|
Payroll related
costs
|
—
|
|
|
1,222
|
|
Total
restructuring costs
|
1,890
|
|
|
2,209
|
|
|
(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
|
|
|
|
|
March
31,
|
|
|
|
|
2019
|
|
2020
|
|
YoY
Change
|
Research and
Development expenses
|
|
$
|
(46,577)
|
|
|
$
|
(37,515)
|
|
|
(19)
|
%
|
Equity awards
compensation expense
|
|
4,025
|
|
|
2,370
|
|
|
(41)
|
%
|
Depreciation and
Amortization expense (1)
|
|
3,477
|
|
|
5,650
|
|
|
62
|
%
|
Pension service
costs
|
|
193
|
|
|
269
|
|
|
39
|
%
|
Restructuring
costs (2)
|
|
—
|
|
|
995
|
|
|
NM
|
|
Non GAAP - Research
and Development expenses
|
|
(38,882)
|
|
|
(28,231)
|
|
|
(27)
|
%
|
Sales and Operations
expenses
|
|
(95,909)
|
|
|
(84,974)
|
|
|
(11)
|
%
|
Equity awards
compensation expense
|
|
6,201
|
|
|
3,618
|
|
|
(42)
|
%
|
Depreciation and
Amortization expense
|
|
4,864
|
|
|
4,340
|
|
|
(11)
|
%
|
Pension service
costs
|
|
72
|
|
|
95
|
|
|
32
|
%
|
Restructuring
costs (2)
|
|
1,890
|
|
|
1,021
|
|
|
(46)
|
%
|
Non GAAP - Sales and
Operations expenses
|
|
(82,882)
|
|
|
(75,900)
|
|
|
(8)
|
%
|
General and
Administrative expenses
|
|
(33,770)
|
|
|
(25,915)
|
|
|
(23)
|
%
|
Equity awards
compensation expense
|
|
3,656
|
|
|
2,515
|
|
|
(31)
|
%
|
Depreciation and
Amortization expense
|
|
1,820
|
|
|
1,377
|
|
|
(24)
|
%
|
Pension service
costs
|
|
129
|
|
|
174
|
|
|
35
|
%
|
Restructuring
costs (2)
|
|
—
|
|
|
193
|
|
|
NM
|
|
Non GAAP - General
and Administrative expenses
|
|
(28,165)
|
|
|
(21,656)
|
|
|
(23)
|
%
|
Total Operating
expenses
|
|
(176,256)
|
|
|
(148,404)
|
|
|
(16)
|
%
|
Equity awards
compensation expense
|
|
13,882
|
|
|
8,503
|
|
|
(39)
|
%
|
Depreciation and
Amortization expense (1)
|
|
10,161
|
|
|
11,367
|
|
|
12
|
%
|
Pension service
costs
|
|
394
|
|
|
538
|
|
|
37
|
%
|
Restructuring
costs (2)
|
|
1,890
|
|
|
2,209
|
|
|
17
|
%
|
Total Non GAAP
Operating expenses (3)
|
|
$
|
(149,929)
|
|
|
$
|
(125,787)
|
|
|
(16)
|
%
|
|
(1) For the Three Months Ended
March 31, 2020, the Company recognized an accelerated amortization
for Manage technology due to a revised useful life in 2019 ($3.3
million in Research and development).
|
|
(2) For
the Three Months Ended March 31, 2020, the Company recognized
restructuring charges following its new organizational structure
implemented to support its multi-product platform strategy and
office right sizing policy, respectively, initiated at the end of
the fiscal year ended December 31, 2019 as detailed
below:
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2019
|
|
2020
|
Depreciation and
amortization expense
|
1,143
|
|
|
—
|
|
Facilities and
impairment related costs
|
747
|
|
|
987
|
|
Payroll related
costs
|
—
|
|
|
1,222
|
|
Total
restructuring costs
|
1,890
|
|
|
2,209
|
|
|
(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
|
|
|
|
|
March
31,
|
|
|
|
|
2019
|
|
2020
|
|
YoY
Change
|
Equity awards
compensation expense
|
|
|
|
|
|
|
Research and
development
|
|
$
|
4,025
|
|
|
$
|
2,370
|
|
|
(41)
|
%
|
Sales and
operations
|
|
6,201
|
|
|
3,618
|
|
|
(42)
|
%
|
General and
administrative
|
|
3,656
|
|
|
2,515
|
|
|
(31)
|
%
|
Total equity awards
compensation expense
|
|
13,882
|
|
|
8,503
|
|
|
(39)
|
%
|
|
|
|
|
|
|
|
Pension service
costs
|
|
|
|
|
|
|
Research and
development
|
|
193
|
|
|
269
|
|
|
39
|
%
|
Sales and
operations
|
|
72
|
|
|
95
|
|
|
32
|
%
|
General and
administrative
|
|
129
|
|
|
174
|
|
|
35
|
%
|
Total pension service
costs
|
|
394
|
|
|
538
|
|
|
37
|
%
|
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
|
|
|
|
|
Cost of
revenue
|
|
9,135
|
|
|
12,771
|
|
|
40
|
%
|
Research and
development (1)
|
|
3,477
|
|
|
5,650
|
|
|
62
|
%
|
Sales and
operations
|
|
4,864
|
|
|
4,340
|
|
|
(11)
|
%
|
General and
administrative
|
|
1,820
|
|
|
1,377
|
|
|
(24)
|
%
|
Total depreciation
and amortization expense
|
|
19,296
|
|
|
24,138
|
|
|
25
|
%
|
|
|
|
|
|
|
|
Restructuring costs
(2)
|
|
|
|
|
|
|
Research and
development
|
|
—
|
|
|
995
|
|
|
NM
|
|
Sales and
operations
|
|
1,890
|
|
|
1,021
|
|
|
(46)
|
%
|
General and
administrative
|
|
—
|
|
|
193
|
|
|
NM
|
|
Total restructuring
costs
|
|
$
|
1,890
|
|
|
$
|
2,209
|
|
|
17
|
%
|
|
(1) For the Three Months Ended
March 31, 2020, the Company recognized an accelerated amortization
for Manage technology due to a revised useful life in 2019 ($3.3
million in Research and development).
|
|
(2) For
the Three Months Ended March 31, 2020, the Company recognized
restructuring charges following its new organizational structure
implemented to support its multi-product platform strategy and
office right sizing policy, respectively, initiated at the end of
the fiscal year ended December 31, 2019 as detailed
below:
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2019
|
|
2020
|
Depreciation and
amortization expense
|
1,143
|
|
|
—
|
|
Facilities and
impairment related costs
|
747
|
|
|
987
|
|
Payroll related
costs
|
—
|
|
|
1,222
|
|
Total
restructuring costs
|
1,890
|
|
|
2,209
|
|
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
|
|
|
|
|
March
31,
|
|
|
|
|
2019
|
|
2020
|
|
YoY
Change
|
|
|
|
|
|
|
|
Net income
|
|
$
|
21,401
|
|
|
$
|
16,428
|
|
|
(23)
|
%
|
Adjustments:
|
|
|
|
|
|
|
Equity awards
compensation expense
|
|
13,882
|
|
|
8,503
|
|
|
(39)
|
%
|
Amortization of
acquisition-related intangible assets (1)
|
|
5,472
|
|
|
6,848
|
|
|
25
|
%
|
Restructuring costs
(2)
|
|
1,890
|
|
|
2,209
|
|
|
17
|
%
|
Tax impact of the
above adjustments
|
|
(2,940)
|
|
|
(1,960)
|
|
|
(33)
|
%
|
Total net
adjustments
|
|
18,304
|
|
|
15,600
|
|
|
(15)
|
%
|
Adjusted net income
(3)
|
|
$
|
39,705
|
|
|
$
|
32,028
|
|
|
(19)
|
%
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
-
Basic
|
|
64,336,777
|
|
|
61,691,001
|
|
|
|
-
Diluted
|
|
66,041,296
|
|
|
62,125,582
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
per share
|
|
|
|
|
|
|
-
Basic
|
|
$
|
0.62
|
|
|
$
|
0.52
|
|
|
(16)
|
%
|
-
Diluted
|
|
$
|
0.60
|
|
|
$
|
0.52
|
|
|
(13)
|
%
|
|
(1) For the Three Months Ended
March 31, 2020, the Company recognized an accelerated amortization
for Manage technology due to a revised useful life in 2019 ($3.3
million in Research and development).
|
|
(2) For
the Three Months Ended March 31, 2020, the Company recognized
restructuring charges following its new organizational structure
implemented to support its multi-product platform strategy and
office right sizing policy, respectively, initiated at the end of
the fiscal year ended December 31, 2019 as detailed
below:
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2019
|
|
2020
|
Depreciation and
amortization expense
|
1,143
|
|
|
—
|
|
Facilities and
impairment related costs
|
747
|
|
|
987
|
|
Payroll related
costs
|
—
|
|
|
1,222
|
|
Total
restructuring costs
|
1,890
|
|
|
2,209
|
|
|
(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
|
|
|
|
|
March
31,
|
|
|
|
|
2019
|
|
2020
|
|
YoY
Change
|
|
|
|
|
|
|
|
Revenue as
reported
|
|
$
|
558,123
|
|
|
$
|
503,376
|
|
|
(10)
|
%
|
Conversion impact
U.S. dollar/other currencies
|
|
|
|
8,118
|
|
|
|
Revenue at constant
currency(1)
|
|
558,123
|
|
|
511,494
|
|
|
(8)
|
%
|
|
|
|
|
|
|
|
Traffic acquisition
costs as reported
|
|
(322,429)
|
|
|
(297,364)
|
|
|
(8)
|
%
|
Conversion impact
U.S. dollar/other currencies
|
|
|
|
(4,525)
|
|
|
|
Traffic Acquisition
Costs at constant currency(1)
|
|
(322,429)
|
|
|
(301,889)
|
|
|
(6)
|
%
|
|
|
|
|
|
|
|
Revenue ex-TAC as
reported(2)
|
|
235,694
|
|
|
206,012
|
|
|
(13)
|
%
|
Conversion impact
U.S. dollar/other currencies
|
|
|
|
3,593
|
|
|
|
Revenue ex-TAC at
constant currency(2)
|
|
235,694
|
|
|
209,605
|
|
|
(11)
|
%
|
Revenue
ex-TAC(2)/Revenue as reported
|
|
42
|
%
|
|
41
|
%
|
|
|
|
|
|
|
|
|
|
Other cost of revenue
as reported
|
|
(26,045)
|
|
|
(33,806)
|
|
|
30
|
%
|
Conversion impact
U.S. dollar/other currencies
|
|
|
|
(424)
|
|
|
|
Other cost of revenue
at constant currency(1)
|
|
(26,045)
|
|
|
(34,230)
|
|
|
31
|
%
|
|
|
|
|
|
|
|
Adjusted
EBITDA(3)
|
|
68,855
|
|
|
59,190
|
|
|
(14)
|
%
|
Conversion impact
U.S. dollar/other currencies
|
|
|
|
1,617
|
|
|
|
Adjusted
EBITDA(3) at constant currency(1)
|
|
$
|
68,855
|
|
|
$
|
60,807
|
|
|
(12)
|
%
|
Adjusted
EBITDA(3)/Revenue ex-TAC(2)
|
|
29
|
%
|
|
29
|
%
|
|
|
|
(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)
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2019
|
|
2020
|
Shares outstanding as
at January 1,
|
|
64,249,084
|
|
|
62,293,508
|
|
Weighted average
number of shares issued during the period
|
|
87,693
|
|
|
(602,507)
|
|
Basic number of
shares - Basic EPS basis
|
|
64,336,777
|
|
|
61,691,001
|
|
Dilutive effect of
share options, warrants, employee warrants - Treasury
method
|
|
1,704,519
|
|
|
434,581
|
|
Diluted number of
shares - Diluted EPS basis
|
|
66,041,296
|
|
|
62,125,582
|
|
|
|
|
|
|
Shares issued as at
March 31, before Treasury stocks
|
|
66,142,511
|
|
|
66,202,881
|
|
Treasury stock as of
March 31,
|
|
(1,672,404)
|
|
|
(4,533,650)
|
|
Shares outstanding as
of March 31, after Treasury stocks
|
|
64,470,107
|
|
|
61,669,231
|
|
Total dilutive effect
of share options, warrants, employee warrants
|
|
8,000,740
|
|
|
6,982,753
|
|
Fully diluted shares
as at March 31,
|
|
72,470,847
|
|
|
68,651,984
|
|
CRITEO
S.A.
|
Supplemental
Financial Information and Operating Metrics
|
(U.S. dollars in
thousands except where stated, unaudited)
|
|
|
Q2
2018
|
Q3
2018
|
Q4
2018
|
Q1
2019
|
Q2
2019
|
Q3
2019
|
Q4
2019
|
Q1
2020
|
YoY
Change
|
QoQ
Change
|
|
|
|
|
|
|
|
|
|
|
|
Clients
|
18,936
|
19,213
|
19,419
|
19,373
|
19,733
|
19,971
|
20,247
|
20,360
|
5%
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
537,185
|
528,869
|
670,096
|
558,123
|
528,147
|
522,606
|
652,640
|
503,376
|
(10)%
|
(23)%
|
Americas
|
212,781
|
211,247
|
317,350
|
217,993
|
213,974
|
213,937
|
306,250
|
191,745
|
(12)%
|
(37)%
|
EMEA
|
201,080
|
195,230
|
220,904
|
209,643
|
194,359
|
185,556
|
216,639
|
190,114
|
(9)%
|
(12)%
|
APAC
|
123,324
|
122,392
|
131,842
|
130,487
|
119,814
|
123,113
|
129,751
|
121,517
|
(7)%
|
(6)%
|
|
|
|
|
|
|
|
|
|
|
|
TAC
|
(306,963)
|
(305,387)
|
(398,238)
|
(322,429)
|
(304,229)
|
(301,901)
|
(386,388)
|
(297,364)
|
(8)%
|
(23)%
|
Americas
|
(125,502)
|
(126,406)
|
(196,168)
|
(131,545)
|
(129,491)
|
(129,047)
|
(189,092)
|
(120,022)
|
(9)%
|
(37)%
|
EMEA
|
(112,577)
|
(111,131)
|
(128,053)
|
(117,291)
|
(107,401)
|
(103,899)
|
(124,939)
|
(108,397)
|
(8)%
|
(13)%
|
APAC
|
(68,884)
|
(67,850)
|
(74,017)
|
(73,593)
|
(67,337)
|
(68,955)
|
(72,357)
|
(68,945)
|
(6)%
|
(5)%
|
|
|
|
|
|
|
|
|
|
|
|
Revenue ex-TAC
(1)
|
230,222
|
223,482
|
271,858
|
235,694
|
223,918
|
220,705
|
266,252
|
206,012
|
(13)%
|
(23)%
|
Americas
|
87,279
|
84,841
|
121,182
|
86,448
|
84,483
|
84,890
|
117,158
|
71,723
|
(17)%
|
(39)%
|
EMEA
|
88,503
|
84,099
|
92,851
|
92,352
|
86,958
|
81,657
|
91,700
|
81,717
|
(12)%
|
(11)%
|
APAC
|
54,440
|
54,542
|
57,825
|
56,894
|
52,477
|
54,158
|
57,394
|
52,572
|
(8)%
|
(8)%
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from
operating activities
|
40,341
|
50,256
|
85,600
|
67,220
|
52,964
|
43,289
|
59,359
|
56,743
|
(16)%
|
(4)%
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
17,847
|
29,656
|
45,408
|
23,684
|
32,792
|
23,944
|
17,520
|
11,737
|
(50)%
|
(33)%
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures/Revenue
|
3%
|
6%
|
7%
|
4%
|
6%
|
5%
|
3%
|
2%
|
N.A
|
N.A
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
position
|
480,285
|
458,690
|
364,426
|
395,771
|
422,053
|
409,178
|
418,763
|
436,506
|
10%
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
Headcount
|
2,678
|
2,737
|
2,744
|
2,813
|
2,873
|
2,794
|
2,755
|
2,701
|
(4)%
|
(2)%
|
|
|
|
|
|
|
|
|
|
|
|
Days Sales
Outstanding (days - end of month)
|
61
|
60
|
58
|
59
|
58
|
57
|
52
|
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.
|
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SOURCE Criteo S.A.