NEW YORK, July 6, 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 second quarter 2020.
As a result of better than expected business performance, in
particular in the Americas and EMEA and across Retail Media
solutions, Criteo is raising its guidance for the second quarter
2020 and, as of July 6, 2020, now
expects:
- Revenue ex-TAC1 in the range of $174
million to $175
million, or down approximately 19% from prior year's
second quarter at constant currency, including an estimated
negative COVID-19 impact in the quarter of approximately
$40 million;
- Adjusted EBITDA1 in the range of $32 million to $33
million, reflecting positive flow-through of higher than
expected Revenue ex-TAC and continued expense control, partially
offset by a higher allowance for bad debt due to the impact of
COVID-19 on select customers;
- In addition, while not included in the original second quarter
2020 guidance, positive Free Cash-Flow1 in the
second quarter, partly reflecting the relative strength of the
updated Adjusted EBITDA range.
For perspective, this compares to the prior guidance for the
second quarter 2020 of Revenue ex-TAC of $140 million to $147
million (or a decline of approximately 32% to 35% versus the
second quarter last year at constant currency) and Adjusted EBITDA
of $0 to $7 million. The prior guidance for the second
quarter 2020 was provided as part of the Company's first
quarter 2020 earnings release on April
29, 2020.
Criteo plans to report its full second quarter 2020 results
later this month.
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 the 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 the 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
geographies. Accordingly, we believe that Revenue ex-TAC provides
useful information to investors and the market generally in
understanding and evaluating the operating results in the same
manner as our management and board of directors.
Adjusted EBITDA is the 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 the core operating
performance and trends, to prepare and approve the 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 the business. Accordingly, we believe that Adjusted
EBITDA provides useful information to investors and the market
generally in understanding and evaluating the 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 available cash flows.
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. 2,700
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 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.