Press Releases

Criteo Reports Financial Results For The First Quarter 2019, Adjusts 2019 Growth Outlook and Maintains Outlook For 2019 Profitability Margin

NEW YORK – April 30, 2019 – Criteo S.A. (NASDAQ: CRTO), the advertising platform for the open Internet, today announced financial results for the first quarter ended March 31, 2019.

  • Revenue increased 3% at constant currency1 to $558 million.
  • Revenue excluding Traffic Acquisition Costs, or Revenue ex-TAC2, increased 2% at constant currency to
    $236 million, or 42.2% of revenue.
  • Adjusted EBITDA2 decreased 6% at constant currency to $69 million, or 29.2% of Revenue ex-TAC.
  • Cash flow from operating activities decreased 20% to $67 million.
  • Free Cash Flow2 decreased 16% to $44 million.
  • Net income increased 1% to $21 million.
  • Adjusted net income per diluted share2 was $0.60, in line with the prior year period.
  • Due to identified execution issues, we are taking a more modest approach to our 2019 growth outlook.
  • We maintain our 2019 outlook for Adjusted EBITDA margin, highlighting our commitment to profitability.

“While making progress on several priorities, we recognize 2019 is another transition year,” said JB Rudelle,
CEO. “We are working hard to accelerate our transformation.”

“We maintain our Adjusted EBITDA margin outlook for 2019”, said Benoit Fouilland, CFO. “This highlights our
commitment to profitability.”

Operating Highlights

  • Revenue ex-TAC from new products grew 74% year over year to 9% of total.
  • Customer Acquisition, Audience Match, Retail Media’s transactional-Saas offering all grew triple digits.
  • Clients continued to spend more with us as reflected by same-client Revenue3 growth of over 2%.
  • We maintained client retention at close to 90% for all products.
  • Revenue ex-TAC from mobile apps grew 32% year-over-year.
  • Our header-bidding technology now connects to over 3,700 publishers and 135 app developers.
  • We further enriched our client platform with new self-service tools, including analytics and an audience
    creation feature.
  • We took effective measures to drive employee attrition down.
    ___________________________________________________
    1 Growth at constant currency excludes the impact of foreign currency fluctuations and is computed by applying the 2018 average exchange rates for the relevant period to 2019 figures.
    2 Revenue ex-TAC, Adjusted EBITDA, Adjusted net Income per diluted share and Free Cash Flow are not measures calculated in accordance with U.S. GAAP.
    3 Same-client Revenue is the Revenue generated by clients that were live with us in a given quarter and still live with us the same quarter in the following year.

Revenue and Revenue ex-TAC

Revenue declined 1%, and increased 3% at constant currency, to $558 million (Q1 2018: $564 million).
Revenue ex-TAC decreased 2%, and increased 2% at constant currency, to $236 million (Q1 2018:
$240 million). This increase at constant currency was primarily driven by the broader adoption of our new
solutions by existing clients. Revenue ex-TAC margin as a percentage of revenue was 42.2% (Q1 2018:
42.6%).

  • In the Americas, Revenue ex-TAC grew 6%, or 8% at constant currency, to $86 million and represented
    37% of total Revenue ex-TAC.
  • In EMEA, Revenue ex-TAC declined 10%, or 2% at constant currency, to $92 million and represented
    39% of total Revenue ex-TAC.
  • In Asia-Pacific, Revenue ex-TAC grew 1%, or 3% at constant currency, to $57 million and represented
    24% of total Revenue ex-TAC.

Net Income and Adjusted Net Income

Net income increased 1% to $21 million (Q1 2018: $21 million). Net income available to shareholders of Criteo
S.A. was $19 million, or $0.29 per share on a diluted basis (Q1 2018: $20 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 2% to
$40 million, or $0.60 per share on a diluted basis (Q1 2018: $41 million, or $0.60 per share on a diluted basis).

Adjusted EBITDA and Operating Expenses

Adjusted EBITDA declined 12%, or 6% at constant currency, to $69 million (Q1 2018: $78 million). This
decrease in Adjusted EBITDA was primarily driven by a slight increase in Non-GAAP expenses, as well as
proceeds from the disposal of the HookLogic Travel business in the prior-year period. Adjusted EBITDA margin
as a percentage of Revenue ex-TAC was 29.2% (Q1 2018: 32.4%), a 320-basis point decrease year over
year.

Operating expenses were $176 million (Q1 2018: $176 million), in line with the prior-year period. 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 2% to $150 million (Q1 2018: $148 million).

Cash Flow and Cash Position

Cash flow from operating activities decreased 20% to $67 million (Q1 2018: $85 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 16% to $44 million (Q1 2018: $52 million), representing 63% of Adjusted EBITDA (Q1 2018: 67%).

Business Outlook

We believe that, due to delays in execution, some of the new capabilities we are building to achieve our
company transformation are going to take more time to yield expected benefits. As a result, we are taking a
more modest approach to our 2019 growth outlook but maintain our 2019 outlook for profitability margin,
highlighting our commitment to profitability.

The following forward-looking statements reflect Criteo’s expectations as of April 30, 2019.

Second quarter 2019 guidance:

  • We expect Revenue ex-TAC to be between $221 million and $224 million. This implies a constant-currency
    growth of -2% to 0%.
  • We expect Adjusted EBITDA to be between $50 million and $53 million.

Fiscal year 2019 guidance:

  • We now expect Revenue ex-TAC growth for fiscal year 2019 to be between 0% and 2% at constant
    currency.
  • Despite the lower guidance for Revenue ex-TAC, we maintain our expectation for an Adjusted EBITDA
    margin of approximately 30% of Revenue ex-TAC for fiscal year 2019.

The above guidance for the quarter ending June 30, 2019 and the fiscal year ending December 31, 2019,
assumes the following 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 110, a U.S. dollar-British pound rate of 0.76 and a U.S. dollar-
Brazilian real rate of 3.81.

The above guidance assumes no acquisitions are completed during the quarter ending June 30, 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, acquisitionrelated
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 June 30, 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, 2019, and the Quarterly

Report on Form 10-Q for the quarter ended March 31, 2019 that will be filed with the SEC, 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, April 30, 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

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