Press Releases

Criteo Reports Financial Results For The Fourth Quarter And Fiscal Year 2018

NEW YORK – February 13, 2019 – Criteo S.A. (NASDAQ: CRTO), the advertising platform for the open
Internet, today announced financial results for the fourth quarter and fiscal year ended December 31, 2018.

Q4 2018

  • Revenue decreased 1% year-over-year, or increased 1% at constant currency1, to $670 million.
  • Revenue excluding Traffic Acquisition Costs, or Revenue ex-TAC2, decreased 2% year-over-year, or
    increased 0.1% at constant currency, to $272 million, or 41% of revenue.
  • Adjusted EBITDA2 decreased 13% year-over-year, or 12% at constant currency, to $105 million, or 39%
    of Revenue ex-TAC.
  • Cash flow from operating activities increased 8% year-over-year to $86 million.
  • Free Cash Flow2 was $40 million.
  • Net income decreased 20% year-over-year to $42 million.
  • Adjusted net income per diluted share2 decreased 31% year-over-year to $0.84.

Fiscal Year 2018

  • Revenue increased 0.2% year-over-year, or decreased 1% at constant currency, to $2,300 million.
  • Revenue ex-TAC increased 3% year-over-year, or 2% at constant currency, to $966 million, or 42% of
    revenue.
  • Adjusted EBITDA increased 4% year-over-year, or 0.1% at constant currency, to $321 million, or 33%
    of Revenue ex-TAC.
  • Cash flow from operating activities increased 6% year-over-year to $261 million.
  • Free Cash Flow was $135 million.
  • Net income decreased 1% year-over-year to $96 million.
  • Adjusted net income per diluted share decreased 8% year-over-year to $2.49.

“The recurring nature of our business reflects the great value our clients place in our performance”, said JB
Rudelle, CEO. “We are building on this trust to expand our client partnerships with new solutions”.
“Our Q4 results mark an inflection point in our trajectory”, commented Benoit Fouilland, CFO. “We expect
to see positive momentum in 2019 driven by healthy fundamentals and our broader multi-solution platform”.

Q4 2018 Operating Highlights

  • Revenue ex-TAC from our new solutions represented over 13% of our total business, growing 54%
    year-over-year.
  • Same-client Revenue ex-TAC3 was flat year-over-year at constant currency despite continued
    headwinds over the period.
  • We grew clients 7% year-over-year, ending the quarter with close to 19,500 commerce and brand clients,
    while maintaining client retention at close to 90% for our all our solutions combined.
  • Our app business grew 54% year-over-year on a Revenue ex-TAC basis.
  • We had 13% of our live clients using at least two of our solutions, up from only 4% in the prior year.
  • Our header bidding technology is now connected to the vast majority of our direct publishers, with close
    to 3,500 large publishers now using Criteo Direct Bidder, compared to 2,600 at the end of Q3.
  • Revenue and Revenue ex-TAC

Q4 2018

Revenue decreased 1% year-over-year, or increased 1% at constant currency1, to $670 million (Q4 2017:
$674 million).

Revenue ex-TAC decreased 2% year-over-year, or increased 0.1% at constant currency, to $272 million
(Q4 2017: $277 million). This year-over-year growth at constant currency was largely driven by a strong
Holiday season across the U.S. and Europe, and was well balanced between the contribution of new clients
and our existing clients, despite external headwinds. This return to growth at constant currency marks an
inflection point in our growth trajectory.

  • In the Americas, Revenue ex-TAC decreased 0.1% year-over-year, or increased 1% at constant
    currency, to $121 million and represented 45% of total Revenue ex-TAC.
  • In EMEA, Revenue ex-TAC decreased 7% year-over-year, or 4% at constant currency, to $93 million
    and represented 34% of total Revenue ex-TAC.
  • In Asia-Pacific, Revenue ex-TAC increased 5% year-over-year, or 6% at constant currency, to $58 million
    and represented 21% of total Revenue ex-TAC.

Revenue ex-TAC margin as a percentage of revenue decreased 50 basis points year-over-year to 41%.

Fiscal Year 2018

Revenue increased 0.2% year-over-year, or decreased 1% at constant currency, to $2,300 million (2017:
$2,297 million).

Revenue ex-TAC increased 3% year-over-year, or 2% at constant currency, to $966 million (2017:
$941 million). The year-over-year growth was primarily driven by the contribution of new clients, as the lower
contribution of existing clients compared to 2017 was largely driven by significant external headwinds. Our
growth in 2018 reflects the resilient and recurring nature of our business.

  • In the Americas, Revenue ex-TAC increased 1% year-over-year, or 2% at constant currency, to
    $374 million and represented 39% of total Revenue ex-TAC.
  • In EMEA, Revenue ex-TAC increased 3% year-over-year, and was flat at constant currency, to
    $368 million and represented 38% of total Revenue ex-TAC.
  • In Asia-Pacific, Revenue ex-TAC increased 6% year-over-year, or 5% at constant currency, to
    $223 million and represented 23% of total Revenue ex-TAC.

Revenue ex-TAC margin as a percentage of revenue increased 100 basis points year-over-year to 42%.

Net Income and Adjusted Net Income

Q4 2018

Net income decreased 20% year-over-year to $42 million (Q4 2017: $52 million). Net income available to
shareholders of Criteo S.A. was $38 million, or $0.57 per share on a diluted basis (Q4 2017: $53 million, or
$0.78 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 31% year-over-year
to $56 million, or $0.84 per share on a diluted basis (Q4 2017: $82 million, or $1.21 per share on a diluted
basis).

Fiscal Year 2018

Net income decreased 1% year-over-year to $96 million (2017: $97 million). Net income available to
shareholders of Criteo S.A. was $89 million, or $1.31 per share on a diluted basis (2017: $91 million, or
$1.34 per share on a diluted basis).

Adjusted net income decreased 8% year-over-year to $169 million, or $2.49 per share on a diluted basis
(2017: $183 million, or $2.70 per share on a diluted basis).

Adjusted EBITDA and Operating Expenses

Q4 2018

Adjusted EBITDA decreased 13%, or 12% at constant currency, to $105 million (Q4 2017: $120 million).
This decrease was primarily driven by the Revenue ex-TAC performance across regions as well as slightly
higher Non-GAAP operating expenses, in particular in General & Administrative.

Adjusted EBITDA margin as a percentage of Revenue ex-TAC was 39% (Q4 2017: 43%).
Operating expenses decreased 2% year-over-year to $171 million (Q4 2017: $175 million), reflecting a flat
headcount over the period and lower equity award compensation expense. 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, increased 6% year-over-year to $149 million (Q4 2017: $141 million).

Fiscal Year 2018

Adjusted EBITDA increased 4%, or 0.1% at constant currency, to $321 million (2017: $310 million). This
increase was primarily driven by the Revenue ex-TAC performance across regions.

Adjusted EBITDA margin as a percentage of Revenue ex-TAC was 33% (2017: 33%).

Operating expenses increased 1% year-over-year to $687 million (2017: $682 million), reflecting a flat
headcount over the period and lower equity award compensation expense. Non-GAAP Operating Expenses
increased 2% year-over-year to $581 million (2017: $566 million).

Cash Flow and Cash Position

Q4 2018

Cash flow from operating activities increased 8% year-over-year to $86 million (Q4 2017: $79 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, decreased 25% year-over-year to $40 million (Q4 2017: $54 million).

Total cash and cash equivalents decreased $50 million compared to the end of 2017 to $364 million. This
is the net result of the free cash flow generation over the period, offset by our acquisitions of both Storetail
and Manage, the completion of our $80 million share buyback program and a $21 million negative currency
impact on the cash position over the period.

Fiscal Year 2018

Cash flow from operating activities increased 6% year-over-year to $261 million (2017: $245 million).

Free Cash Flow decreased 1% year-over-year to $135 million (2017: $137 million).

Successful completion of a $80 million Share Repurchase Program

Demonstrating our confidence in our ability to achieve our vision over the medium-term and to return to
growth while continuing to generate healthy Free Cash Flow, we had announced on October 31, 2018, that
our Board of Directors had authorized a share repurchase program of up to $80 million of our outstanding

American Depositary Shares.

We successfully completed this $80 million program in the fourth quarter of 2018 and, in total, repurchased
3,499,258 shares at an average price of $22.86, including expenses, under the program.

Business Outlook

The following forward-looking statements reflect Criteo’s expectations as of February 13, 2019.
First Quarter 2019 Guidance:

  • We expect Revenue ex-TAC to be between $233 million and $235 million. This implies year-over-year growth of 1% to 2% at constant-currency.
  • We expect Adjusted EBITDA to be between $59 million and $61 million.

Fiscal Year 2019 Guidance:

  • We expect Revenue ex-TAC for fiscal year 2019 to grow between 3% and 6% at constant currency.
  • We expect Adjusted EBITDA margin for fiscal year 2019 to be approximately 30% of Revenue ex-TAC.

The above guidance for the first quarter ending March 31, 2019, and the fiscal year ending December
31, 2019, assumes the following average exchange rates for the main currencies impacting our business:
a U.S. dollar-euro rate of 0.88, a U.S. dollar-Japanese Yen rate of 109, a U.S. dollar-British pound rate of
0.78 and a U.S. dollar-Brazilian real rate of 3.75.

The above guidance assumes no acquisitions are completed during the first quarter ending March 31, 2019
and the fiscal year ending December 31, 2019.

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.
We expect the variability of the above charges to have a significant, and potentially unpredictable, impact
on our future U.S. GAAP financial results.

Non-GAAP Financial Measures

This press release and its attachments include the following financial measures defined as non-GAAP
financial measures by the U.S. Securities and Exchange Commission (the “SEC”): Revenue ex-TAC,
Revenue ex-TAC by Region, Revenue ex-TAC margin, Adjusted EBITDA, Adjusted EBITDA margin,
Adjusted Net Income, Adjusted Net Income per diluted share, 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 Net Income per diluted share 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 Net Income per diluted share can provide useful measures for period-to-period
comparisons of our business. Accordingly, we believe that Adjusted Net Income and Adjusted Net Income
per diluted share 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 March 31, 2019 and the fiscal year ending December 31, 2019, 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 respond to changes in technology, uncertainty regarding our ability to access
a consistent supply of internet display advertising inventory and expand access to such inventory,
investments in new business opportunities and the timing of these investments, whether the projected
benefits of acquisitions materialize as expected, uncertainty regarding international growth and
expansion, the impact of competition, uncertainty regarding legislative, regulatory or self-regulatory
developments regarding data privacy matters and the impact of efforts by other participants in our
industry to comply therewith, failure to enhance our brand cost-effectively, recent growth rates not being
indicative of future growth, our ability to manage growth, potential fluctuations in operating results, our
ability to grow our base of clients, and the financial impact of maximizing Revenue ex-TAC, as well as
risks related to future opportunities and plans, including the uncertainty of expected future financial
performance and results and those risks detailed from time-to-time under the caption “Risk Factors”
and elsewhere in the Company’s SEC filings and reports, including the Company’s Annual Report on
Form 10-K filed with the SEC on March 1, 2018, including the Risk Factors set forth therein and the
exhibits thereto, the Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed with the
SEC on May 4, 2018, and the Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, filed
with the SEC on August 2, the Quarterly Report on Form 10-Q for the quarter ended September 30,
2018, filed with the SEC on November 5, 2018, as well as future filings and reports by the Company.
Except as required by law, the Company undertakes no duty or obligation to update any forward-looking
statements contained in this release as a result of new information, future events, changes in
expectations or otherwise.
Conference Call Information
Criteo’s earnings conference call will take place today, February 13, 2019, at 8:00 AM ET, 2:00 PM CET.
The conference call will be webcast live on the Company’s website http://ir.criteo.com and will be
available for replay.

Conference call details:

  • 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.

Contacts

Criteo Investor Relations
Edouard Lassalle, VP, Head of IR, 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
Kenya Hayes, Director, Global Public Relations, k.hayes@criteo.com
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