UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

for the quarterly period ended ~~June 30, 2016~~March 31, 2017



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from _________ to _________

Commission file number: 001-36153

Criteo S.A.

(Exact name of registrant as specified in its charter)



France		Not Applicable
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

32, rue Blanche, Paris-France		75009
(Address of principal executive offices)		(Zip Code)

+33 1 40 40 22 90

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 day Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated ~~filer” and~~filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large Accelerated Filer	x	Accelerated Filer	¨
Non-accelerated Filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨
		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has not elected to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of ~~July 31, 2016,~~April 30, 2017, the registrant had ~~63,616,177~~64,754,393 ordinary shares, nominal value €0.025 per share, outstanding.

TABLE OF CONTENTS

General

Except where the context otherwise requires, all references in this Quarterly Report on Form 10-Q (“("Form ~~10-Q”~~10-Q") to the ~~“Company,” “Criteo,” “we,” “us,” “our”~~"Company," "Criteo," "we," "us," "our" or similar words or phrases are to Criteo S.A. and its subsidiaries, taken together. In this Form 10-Q, references to ~~“$”~~"$" and ~~“US$”~~"US$" are to United States dollars. Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or "U.S. GAAP."

Trademarks

“Criteo,” the Criteo logo and other trademarks or service marks of Criteo ~~S.A.~~ appearing in this Form 10-Q are the property of ~~Criteo S.A.~~Criteo. Trade names, trademarks and service marks of other companies appearing in this Form 10-Q are the property of their respective holders.

Special Note Regarding Forward-Looking Statements

This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are based on our management’s beliefs and assumptions and on information currently available to our management. All statements other than present and historical facts and conditions contained in this Form 10-Q, including statements regarding our future results of operations and financial positions, business strategy, plans and our objectives for future operations, are forward-looking statements. When used in this Form 10-Q, the words “anticipate,” “believe,” “can,” “could,” “estimate,” “expect,” “intend,” “is designed to,” “may,” “might,” “plan,” “potential,” “predict,” “objective,” “should,” or the negative of these and similar expressions identify forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

the ability of the Criteo Engine to accurately predict engagement by a user;

our ability to predict and adapt to changes in widely adopted industry platforms and other new technologies;

our ability to continue to collect and utilize data about user behavior and interaction with advertisers;

our ability to acquire an adequate supply of advertising inventory from publishers on terms that are favorable to us;

our ability to meet the challenges of a growing and international company in a rapidly developing and changing industry, including our ability to forecast accurately;

our ability to maintain an adequate rate of revenue growth and sustain profitability;

~~the ability of the Criteo Engine to accurately predict engagement by a user;~~

our ability to ~~continue to collect~~manage our international operations and ~~utilize data about user behavior~~expansion and ~~interaction with advertisers;~~the integration of our acquisitions;

the effects of increased competition in our market;

our ability to adapt to regulatory, legislative or self-regulatory developments regarding internet privacy matters;

our ability to protect users’ information and adequately address privacy concerns;

our ability to ~~acquire an adequate supply of advertising inventory from publishers on terms that are favorable to us;~~

enhance our ~~ability to predict and adapt to changes in widely adopted industry platforms and other new technologies;~~

~~the effects of increased competition in our market;~~brand;

our ability to enter new marketing channels and to effectively scale our technology platform in new industry verticals;

our ability to ~~manage our international operations~~attract and ~~expansion~~retain qualified employees and ~~the integration of our acquisitions;~~key personnel;

our ability to maintain, protect and enhance our brand and intellectual property; and

failures in our systems or ~~infrastructure; and~~

~~our ability to attract and retain qualified employees and key personnel.~~infrastructure.

You should refer to Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, ~~2015~~2016 for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Form 10-Q will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

You should read this Form 10-Q and the documents that we reference in this Form 10-Q and have filed as exhibits to this Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

This Form 10-Q may contain market data and industry forecasts that were obtained from industry publications. These data and forecasts involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such information. We have not independently verified any third-party information. While we believe the market position, market opportunity and market size information included in this Form 10-Q is generally reliable, such information is inherently imprecise.

PART I

Item 1. Financial Statements.

CRITEO S.A.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)


								Notes	December 31, 2016			March 31, 2017
	Notes	December 31, 2015			June 30, 2016
		(in thousands)							(in thousands)
Assets
Current assets:
Cash and cash equivalents	3	$	353,537		$	377,407		3	$	270,317		$	303,813
Trade receivables, net of allowances	4	261,581			266,436			4	397,244			340,837
Income taxes	11	2,714			5,277				2,741			3,560
Other taxes		29,552			39,527				52,942			44,834
Other current assets	5	16,030			23,164			5	19,340			22,772
Total current assets		663,414			711,811				742,584			715,816
Property, plant and equipment, net		82,482			97,236				108,581			115,415
Intangible assets, net	6	16,470			17,170			6	102,944			107,962
Goodwill	6	41,973			46,859			7	209,418			232,138
Non-current financial assets	3	17,184			17,010			3	17,029			19,857
Deferred tax assets	11	20,196			25,330				30,630			46,201
Total non-current assets		178,305			203,605				468,602			521,573
Total assets		$	841,719		$	915,416			$	1,211,186		$	1,237,389
Liabilities and shareholders' equity
Current liabilities:
Trade payables		$	246,382		$	240,757			$	365,788		$	295,602
Contingencies	13	668			283			14	654			980
Income taxes	11	15,365			9,455				14,454			14,969
Financial liabilities - current portion	8	7,156			6,011			9	7,969			84,398
Other taxes		30,463			33,880				44,831			41,414
Employee - related payables		42,275			46,372				55,874			53,862
Other current liabilities	7	15,531			21,531			8	30,221			35,032
Total current liabilities		357,840			358,289				519,791			526,257
Deferred tax liabilities	11	139			518				686			28,900
Retirement benefit obligation		1,445			1,996				3,221			3,276
Financial liabilities - non current portion	8	3,272			2,907			9	77,611			2,620
Other non-current liabilities									—			4,697
Total non-current liabilities		4,856			5,421				81,518			39,493
Total liabilities		362,696			363,710				601,309			565,750
Commitments and contingencies
Shareholders' equity:
Common shares, €0.025 par value, 62,470,881 and 63,562,863 shares authorized, issued and outstanding at December 31, 2015 and June 30, 2016, respectively.		2,052			2,082
Common shares, €0.025 per value, 63,978,204 and 64,665,637 shares authorized, issued and outstanding at December 31, 2016 and March 31, 2017, respectively.								Common shares, €0.025 per value, 63,978,204 and 64,665,637 shares authorized, issued and outstanding at December 31, 2016 and March 31, 2017, respectively.	2,093			2,112
Additional paid-in capital		425,220			456,242				488,277			514,649
Accumulated other comprehensive (loss)		(69,023		)	(60,329		)		(88,593		)	(79,742		)
Retained earnings		116,076			145,407				198,355			222,239
Equity-attributable to shareholders of Criteo S.A.		474,325			543,402				600,132			659,258
Non-controlling interests		4,698			8,304				9,745			12,381
Total equity		479,023			551,706				609,877			671,639
Total equity and liabilities		$	841,719		$	915,416			$	1,211,186		$	1,237,389

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

CRITEO S.A.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)


																Three Months Ended
		Three Months Ended						Six Months Ended						Notes		March 31, 2016			March 31, 2017
	Notes	June 30, 2015			June 30, 2016			June 30, 2015			June 30, 2016				(in thousands, except share per data)
		(in thousands, except share and per share data)
Revenue		$	299,306		$	407,201		$	593,478		$	808,454				$	401,253		$	516,667

Cost of revenue:
Traffic acquisition costs		(177,239		)	(240,969		)	(353,127		)	(479,724		)			(238,755		)	(306,693		)
Other cost of revenue		(14,243		)	(20,279		)	(27,212		)	(38,618		)			(18,338		)	(27,155		)

Gross profit		107,824			145,953			213,139			290,112					144,160			182,819

Operating expenses:
Research and development expenses		(19,853		)	(30,235		)	(37,699		)	(57,396		)			(27,162		)	(39,521		)
Sales and operations expenses		(59,727		)	(69,225		)	(112,810		)	(133,698		)			(64,473		)	(90,730		)
General and administrative expenses		(20,404		)	(28,610		)	(37,950		)	(53,347		)			(24,737		)	(31,516		)
Total operating expenses		(99,984		)	(128,070		)	(188,459		)	(244,441		)			(116,372		)	(161,767		)
Income from operations		7,840			17,883			24,680			45,671					27,788			21,052
Financial income (expense)	10	(2,546		)	(94		)	1,374			(1,412		)	11		(1,317		)	(2,333		)
Income before taxes		5,294			17,789			26,054			44,259					26,471			18,719
Provision for income taxes	11	(1,365		)	(4,450		)	(8,508		)	(12,394		)	12		(7,944		)	(4,201		)
Net income		$	3,929		$	13,339		$	17,546		$	31,865				$	18,527		$	14,518

Net income available to shareholders of Criteo S.A.		$	3,540		$	12,200		$	16,522		$	29,330				$	17,131		$	12,442
Net income available to non-controlling interests		$	389		$	1,139		$	1,024		$	2,535				$	1,396		$	2,076

Net income allocated to shareholders of Criteo S.A. per share:
Basic	12	$	0.06		$	0.19		$	0.27		$	0.47		13		$	0.27		$	0.19
Diluted	12	$	0.05		$	0.19		$	0.25		$	0.45		13		$	0.26		$	0.18

Weighted average shares outstanding used in computing per share amounts:
Basic	12	61,719,367			63,246,785			61,448,678			62,928,221			13		62,610,013			64,189,194
Diluted	12	65,279,611			65,625,097			65,012,687			65,232,938			13		64,841,134			67,283,012

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

CRITEO S.A.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)


	Three Months Ended						Six Months Ended							Three Months Ended
	June 30, 2015			June 30, 2016			June 30, 2015			June 30, 2016				March 31, 2016			March 31, 2017
	(in thousands)												(in thousands)

Net income	$	3,929		$	13,339		$	17,546		$	31,865			$	18,527		$	14,518
Foreign currency translation differences, net of taxes	13,745			(10,660		)	(29,379		)	10,028				20,689			9,092
Foreign currency translation differences	13,745			(10,660		)	(29,379		)	10,028				20,689			9,092
Income tax effect	—			—			—			—				—			—
Actuarial (losses) gains on employee benefits, net of taxes	359			(10		)	213			(209		)		(200		)	253
Actuarial losses on employee benefits	433			(11		)	257			(251		)		(238		)	297
Income tax effect	(74		)	1			(44		)	42				38			(44		)
Financial instruments, net of taxes	—			—			—			—				—			—
Fair value change on financial instruments	—			—			—			—				—			—
Income tax effect	—			—			—			—				—			—
Comprehensive income (loss)	$	18,033		$	2,669		$	(11,620	)	$	41,684			$	39,016		$	23,863
Attributable to shareholders of Criteo S.A.	$	17,696		$	878		$	(12,584	)	$	38,122			$	37,245		$	21,293
Attributable to non-controlling interests	$	337		$	1,791		$	964		$	3,562			$	1,771		$	2,570

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

CRITEO S.A.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Three Months Ended						Six Months Ended							Three Months Ended
	June 30, 2015			June 30, 2016			June 30, 2015			June 30, 2016				March 31, 2016			March 31, 2017
	(in thousands)												(in thousands)
Net income	$	3,929		$	13,339		$	17,546		$	31,865			$	18,527		$	14,518
Adjustments to reconcile to cash from operating activities	17,646			30,121			39,530			59,626
Amortization and provisions	10,938			16,345			19,201			29,525
Equity awards compensation expense ⁽¹⁾	5,325			7,695			11,642			16,065
Net gain on disposal of non-current assets	22			—			26			—
Interest accrued	2			1,578			7			1,580
Non-cash financial expenses	(6		)	8			147			18
Change in deferred taxes	(2,200		)	(3,285		)	(2,170		)	(4,424		)
Income tax for the period	3,565			7,780			10,677			16,862
Non-cash and non-operating items														29,506			41,473
- Amortization and provisions														13,180			22,316
- Equity awards compensation expense ⁽¹⁾														8,370			14,940
- Interests accrued and non-cash financial income and expenses														12			16
- Change in deferred taxes														(1,138		)	(6,870		)
- Income tax for the period														9,082			11,071
Change in working capital requirement	(4,125		)	(10,297		)	4,779			(27,436		)		(17,140		)	(70		)
(Increase)/decrease in trade receivables	(3,218		)	(7,126		)	(12,639		)	(2,368		)
Increase/(decrease) in trade payables	3,682			(1,244		)	27,619			(15,149		)
(Increase)/decrease in other current assets	(5,243		)	(5,969		)	(15,883		)	(15,777		)
Increase/(decrease) in other current liabilities	654			4,042			5,682			5,858
- Decrease in trade receivables														4,758			59,569
- Decrease in trade payables														(13,906		)	(75,030		)
- (Increase)/Decrease in other current assets														(10,368		)	8,253
- Increase in other current liabilities														2,376			7,138
Income taxes paid	(5,512		)	(13,889		)	(8,909		)	(25,874		)		(11,986		)	(11,683		)
Cash from operating activities	11,938			19,274			52,946			38,181				18,907			44,238
Acquisition of intangibles assets, property, plant and equipment	(29,630		)	(25,564		)	(41,156		)	(39,178		)		(13,615		)	(23,267		)
Change in accounts payable related to intangible assets, property, plant and equipment	11,282			3,178			9,948			4,685				1,507			(4,939		)
Payments for acquired business, net of cash	(2,867		)	(5,074		)	(20,075		)	(5,074		)
Change in other financial non-current assets	(1,492		)	(207		)	(5,244		)	574				781			(431		)
Cash used for investing activities	(22,707		)	(27,667		)	(56,527		)	(38,993		)
Cash used in investing activities														(11,327		)	(28,637		)
Issuance of long-term borrowings	1,567			2,295			2,394			3,059				764			—
Repayment of borrowings	(1,369		)	(3,944		)	(4,647		)	(5,448		)		(1,503		)	(2,053		)
Proceeds from capital increase	3,664			10,106			6,434			15,582				5,476			12,937
Change in other financial liabilities	—			(171		)	(1,000		)	(171		)		—			119
Cash from financing activities	3,862			8,286			3,181			13,022				4,737			11,003
Change in net cash and cash equivalents	(6,907		)	(107		)	(400		)	12,210				12,317			26,604
Net cash and cash equivalents - beginning of period	316,376			386,110			351,827			353,537				353,537			270,317
Effect of exchange rate changes on cash and cash equivalents	11,640			(8,596		)	(30,318		)	11,660				20,256			6,892
Net cash and cash equivalents - end of period	$	321,109		$	377,407		$	321,109		$	377,407			$	386,110		$	303,813

⁽¹⁾ ~~Out of which $7.2~~$8.3 million and ~~$15.5~~$14.6 million isof equity awards compensation expense consisted of share-based compensation expense according to ASC 718 - Compensation - ~~Stock~~stock compensation for the quarter ended March 31, 2016 and ~~year to date June 30, 2016,~~2017, respectively.

The accompanying notes form an integral part of these unaudited condensed consolidated financial statements.

CRITEO S.A.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Criteo S.A. is a global technology company specialized in digital performance marketing. We strive to deliver post-click sales to our advertiser clients at scale and according to the client's targeted return on investment. In these notes, Criteo S.A. is referred to as the ~~Parent~~"Parent" company and together with its subsidiaries, collectively, as ~~"Criteo", the" Company",~~"Criteo," the ~~"Group",~~"Company," the "Group," or "we". The Company uses its proprietary predictive software algorithms coupled with its deep insights into expressed consumer intent and purchasing habits to price and deliver highly relevant and personalized performance advertisements to consumers in real time.

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements included herein have been prepared by Criteo S.A. pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Annual Report filed on Form 10-K for the year ended December 31, ~~2015,~~2016, filed with the SEC on ~~February 29, 2016.~~March 1, 2017. The unaudited condensed consolidated financial statements included herein reflect all adjustments (consisting of normal, recurring adjustments) which are, in the opinion of management, necessary to state fairly the results for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for any subsequent interim period or for the fiscal year.

Conformity with U.S. GAAP requires the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses in the condensed consolidated financial statements and accompanying notes. We base our estimates and judgments on historical information and on various other assumptions that we believe are reasonable under the circumstances. Our actual results may differ from these estimates. U.S. GAAP requires us to make estimates and judgments in several areas, including, but not limited to: (1) the recognition of ~~revenue;~~revenue and particularly the determination as to whether revenue should be reported on a gross or a net basis; (2) the evaluation of our trade receivables and the recognition of a valuation ~~allowance;~~allowance for doubtful accounts; (3) the recognition and measurement of goodwill and intangible assets and particularly costs capitalized in relation to our customized internal-use software; (4) the measurement of share-based compensation and (5) the tax provision determination and particularly the estimate of our annual effective tax rate.

There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2015~~2016 that have had a material impact on our unaudited condensed consolidated financial statements and related notes.

~~Recently Issued~~ Accounting ~~Standards~~

~~In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. ASU 2015-16 requires an acquirer to recognize adjustments to provisional amounts that are identified during the measurement period~~Pronouncements adopted in the reporting period in which the adjustment amounts are determined, including the cumulative effect of the change in provisional amount, as if the accounting had been completed at the acquisition date. The Company does not expect the provision of ASU 2015-16 to have a material impact on its consolidated financial statements. This update will be effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. Early adoption is permitted for financial statements that have not yet been made available for issuance.2017

InFrom January ~~2016, the FASB issued~~1, 2017, we adopted ASU ~~2016-01,~~ ~~Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities~~. ASU 2016-01 requires that all financial assets and liabilities not accounted for under the equity method be measured at fair value, with the changes in fair value recognized in net income. The amendments in this update also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments in this update supersede the requirement to disclose the methods and significant assumptions used in calculating the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. The Company can early adopt the provision requiring it to recognize in other comprehensive income the fair value change from instrument-specific credit risk measured using the fair value option for financial instruments. Except for this early application guidance, early adoption is not permitted. The Company is still evaluating the effects that the provision of ASU 2016-01 will have on its consolidated financial statements. This update will be effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption as of fiscal years beginning after December 15, 2017, including interim periods within those fiscal year, is permitted.

~~In February 2016, the FASB issued ASU 2016-02,~~2016-09, ~~Leases~~Compensation-Stock Compensation (Topic ~~842)~~. ASU 2016-02 requires an entity to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. The amendments also require certain quantitative and qualitative disclosures about leasing arrangements. Early adoption is permitted. The updated guidance requires a modified retrospective adoption. The Company is still evaluating the effects that the provision of ASU 2016-02 will have on its consolidated financial statements. This update will be effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early application is permitted.

~~In March 2016, the FASB issued ASU 2016-08,~~ ~~Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net). ASU 2016-08 amends the principal-versus-agent implementation guidance and illustrations in the FASB's new revenue standard~~ ~~Revenue from Contracts with Customers (ASC Topic 606)~~. The Company is currently evaluating the impact of ASU 2016-08 on its consolidated financial statements. This update will be effective for fiscal years beginning after December 15, 2018, and interim periods within annual reporting periods beginning after December 15, 2019. Earlier application is permitted only as of fiscal years beginning after December 15, 2016, including interim periods within that fiscal year, or fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning one year after the fiscal year in which an entity first applies the guidance in Update 2014-09.

~~In March 2016 the FASB issued ASU 2016-09,~~ ~~Improvements~~718): Improvement to Employee ~~Share-Based~~Share-based Payment Accounting~~. ASU 2016-09 was~~ issued ~~as part of FASB’s initiative to reduce complexity in accounting standards. The areas for simplification in this update involve several~~by the Financial Accounting Standards Board (FASB), which among other items, simplifies certain aspects of the accounting for ~~employee~~ share-based payment transactions ~~including~~to employees. The new standard particularly requires excess tax benefits and tax deficiencies to be recorded in the statements of income as a component of the provision for income taxes when stock awards vest or are settled. The effective date is January 1, 2017. Upon adoption, a cumulative effect of $10.0 million of this change has been recognized through retained earnings. The adoption of the standard also resulted in a current year tax ~~consequences, classification~~expense of ~~awards as either equity or liabilities,~~$0.8 million which previously would have been recognized in the current period in additional paid-in capital.

Accounting Pronouncements not yet adopted

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) ("ASU 2017-01") the purpose of which is to change the definition of a business to assist entities in evaluating when a set of transferred assets and ~~classification on the statement of cash flows.~~activities is a business. This update will be effective for annual periods beginning after December 15, ~~2016,~~2017, including interim periods within those periods. The adoption of ASU 2017-01 is not expected to have a material impact on our financial position or results of operations.

In January 2017, the FASB issued ASU 2017-04 Goodwill and Other (Topic 350). ASU 2017-04 simplifies the subsequent measurement of goodwill and reduces the cost and complexity of evaluating goodwill for impairment. It eliminates the need for entities to calculate the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Under this amendment, an entity will perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit's fair value. This update will be effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The adoption of ASU 2017-04 is not expected to have a material impact on our financial position or results of operations.

In March 2017, FASB issued ASU 2017-07 Compensation-Retirements Benefits (Topic 715). ASU 2017-07 requires that an employer disaggregate the service cost component from the other components of net benefit cost. The amendments also provide explicit guidance on how to present the service cost component and the other components of net benefit cost in the income statement and allow only the service cost component of net benefit cost to be eligible for capitalization. The amendments in ASU 2017-07 improve the consistency, transparency, and usefulness of financial information to users that have communicated that the service cost component generally is analyzed differently from the other components of net benefit cost. This update will be effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. ~~Early adoption is permitted~~The amendments in ~~any interim or annual period.~~

~~In April 2016~~ASU 2017-07 should be applied retrospectively for the ~~FASB issued ASU 2016-10,~~ ~~Identifying Performance Obligations~~presentation of the service cost component and ~~Licensing. ASU 2016-10 clarifies guidance related to identifying performance obligations~~the other components of net periodic pension cost and ~~licensing implementation guidance contained~~net periodic post-retirement benefit cost in the ~~new revenue~~income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic post-retirement benefit in assets. We intend to adopt the standard ~~Revenue from Contracts with Customers (ASC Topic 606). The Company is currently evaluating~~on the ~~impact of ASU 2016-10 on its consolidated financial statements. The~~ effective date of January 1, 2018. The adoption of ASU ~~2016-10~~2017-07 is ~~the same as for requirements~~not expected to have a material impact on our financial position or results of ~~ASC Topic 606.~~operations.

~~In May 2016 the FASB issued ASU 2016-11,~~ ~~Rescission of SEC Guidance Because of Accounting Standards Updates 2015-09 and 2014-06 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting (SEC Update).~~ ASU 2016-11 rescinds certain SEC Staff Guidance relating to ASC topics 605 (Revenue Recognition), 932 (Extractive Activities - Oil and Gas), and 815 (Derivatives and Hedging). The ASU became effective immediately. The Company has evaluated the rescinded SEC Staff Guidance and determined it does not have an impact on the consolidated financial statements.

~~In May 2016 the FASB issued ASU 2016-12,~~ ~~Narrow Scope Improvements and Practical Expedients.~~ ~~ASU 2016 - 12 amends narrow aspects of the new revenue standard~~ ~~Revenue from Contracts with Customers (ASC Topic 606)~~ including guidance on assessing collectability, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition. The Company is currently evaluating the impact of ASU 2016-12 on its consolidated financial statements. The effective date of ASU 2016-12 is the same as for requirements of ASC Topic 606.

~~In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326)~~ ~~Measurement of Credit Losses on Financial Statements~~. ASU 2016-13 amends the guidance on the impairment of financial instruments. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses rather than incurred credit losses. In addition, this amendment broadens the information an entity must consider in developing its expected credit loss estimate including the use of forecasts in order to ensure more timely information is used to develop the estimate. The Company is currently evaluating the impact of ASU 2016-13 on its consolidated financial statements. This update will be effective for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year.

Note 2. Significant Events and Transactions of the Period

Amendment on Group Revolving Credit Facility agreement

~~Changes in~~In September 2015, Criteo S.A. entered into a Multicurrency Revolving Facility Agreement for general purposes of the ~~scope~~Group including the funding of ~~consolidation~~business combinations. On March 29, 2017, this agreement was amended by, among other things, increasing the amount of facility from €250.0 million to €350.0 million and extending the term of the contract from 2020 to 2022.

~~Business combination~~

~~Monsieur Drive Acquisition~~

~~On May 31, 2016, we acquired all of the outstanding shares of Monsieur Drive S.A.S., a Paris-based company~~

building advertising products for the consumer packaged goods vertical. The total consideration paid was $5.1 million (€4.6 million) for the acquisition of the shares, financed by the available cash resources at the acquisition date (Note 6). This business combination will be accounted for under the acquisition method in accordance with ~~ASC 805 – Business Combinations~~. The determination of the fair value of assets acquired and liabilities assumed is in progress and the impact of the transaction will be reflected in our consolidated financial statements as of December 31, 2016.

~~Consolidation scope~~

~~Creation of Criteo India Pvt Ltd (India)~~

This new subsidiary is 100% held and controlled by the Parent company. It is included in the Company’s consolidation scope as of June 30, 2016, but its contribution to the unaudited condensed consolidated financial statements is not material.

Note 3. Financial Instruments

~~Financial Assets~~Credit Risk

The maximum exposure to credit risk at the end of each reported period is represented by the carrying amount of financial assets, and summarized in the following ~~schedules disclose~~table:



	December 31, 2016		March 31, 2017

Cash and cash equivalents	$	270,317	$	303,813
Trade receivables, net of allowance	397,244		340,837
Other taxes	52,942		44,834
Other current assets	19,340		22,772
Non-current financial assets	$	17,029	$	19,857
Total	$	756,872	$	732,113

As of December 31, 2016 and March 31, 2017, no customer accounted for 10% or more of trade receivables.

We perform ongoing credit evaluations of our customers and do not require collateral. We maintain an allowance for estimated credit losses. During the twelve-month period ended December 31, 2016 and the three-month period ended March 31, 2017, our net change in allowance for doubtful accounts was $5.4 million and $1.5 million, respectively.

For our financial assets, ~~categories for~~ the ~~presented periods:~~fair value approximates the carrying amount, given the nature of the financial assets and the maturity of the expected cash flows.

December 31, 2015
Carrying Value
Loans and receivables

Assets designated at FVTPL ⁽¹⁾

Fair value
(in thousands)
Cash and cash equivalents $ 353,537
$ —
$ 353,537
$ 353,537
Trade receivables, net of allowances 261,581
261,581
—
261,581
Other taxes 29,552
29,552
—
29,552
Other current assets 16,030
16,030
—
16,030
Non-current financial assets 17,184
17,184
—
17,184
Total $ 677,884
$ 324,347
$ 353,537
$ 677,884


⁽¹⁾	~~Fair value through profit or loss.~~

June 30, 2016
Carrying Value Loans and receivables
Assets designated at FVTPL ⁽¹⁾
Fair value
(in thousands)
Cash and cash equivalents $ 377,407
$ —
$ 377,407
$ 377,407
Trade receivables, net of allowances 266,436
266,436
—
266,436
Other taxes 39,527
39,527
—
39,527
Other current assets 23,164
23,013
151
23,164
Non-current financial assets 17,010
17,010
—
17,010
Total $ 723,544
$ 345,986
$ 377,558
$ 723,544


⁽¹⁾	~~Fair value through profit or loss.~~

~~Financial Liabilities~~

December 31, 2015
Carrying Value Amortized Cost
Liabilities designated at FVTPL⁽¹⁾
Fair value
(in thousands)
Trade payables $ 246,382
$ 246,382
$ —
$ 246,382
Other taxes 30,463
30,463
—
30,463
Employee-related payables 42,275
42,275
—
42,275
Other current liabilities 15,531
15,531
—
15,531
Financial liabilities 10,428
9,876
552
10,428
Total $ 345,079
$ 344,527
$ 552
$ 345,079


⁽¹⁾	~~Fair value through profit or loss.~~

June 30, 2016
Carrying Value
Amortized Cost

Liabilities designated at FVTPL⁽¹⁾

Fair value
(in thousands)
Trade payables $ 240,757
$ 240,757
$ —
$ 240,757
Other taxes 33,880
33,880
—
33,880
Employee-related payables 46,372
46,372
—
46,372
Other current liabilities 21,531
21,531
—
21,531
Financial liabilities 8,918
8,918
—
8,918
Total $ 351,458
$ 351,458
$ —
$ 351,458


⁽¹⁾	~~Fair value through profit or loss.~~

Fair Value Measurements

We measure the fair value of our cash equivalents, which include money market funds and interest bearing deposits, as level 1 and level 2 measurements because they are valued using quoted market prices and observable market data, respectively.

Financial assets or liabilities include derivative financial instruments used to manage our exposure to the risk of exchange rate fluctuations. These instruments are considered level 2 financial instruments as they are measured using valuation techniques based on observable market data.

~~The following tables provide information~~

Trade Receivables

Credit risk is defined as an unexpected loss in cash and earnings if the client is unable to pay its obligations in due time. We perform internal ongoing credit risk evaluations of our clients. When a possible risk exposure is identified, we require prepayments.

For each period presented, the aging of trade receivables and allowances for ~~the assets and liabilities carried at fair value~~potential losses is as ~~of December 31, 2015 and June 30, 2016:~~follows:

Fair Value Measurements Using
December 31, 2015
Level 1
Level 2
Level 3
(in thousands)
Money market funds $ 54,188
$ 54,188
$ —
$ —
Interest-bearing bank deposits 114,127
—
114,127
—
Cash 185,222
185,222
—
—
Total assets measured at fair value $ 353,537
$ 239,410
$ 114,127
$ —

Derivative instruments $ 552
$ —
$ 552
$ —
Total liabilities measured at fair value $ 552
$ —
$ 552
$ —



	December 31, 2016									March 31, 2017
	Gross value		%		Allowance			%		Gross value		%		Allowance			%
	(in thousands)				(in thousands)					(in thousands)				(in thousands)

Not yet due	$	265,600	65.0	%	$	—		—	%	$	232,460	65.5	%	$	(735	)	5.6	%
0 - 30 days	92,163		22.5	%	(49		)	0.4	%	70,289		19.9	%	(360		)	2.7	%
31 - 60 days	19,747		4.8	%	(182		)	1.6	%	16,196		4.6	%	(628		)	4.7	%
61 - 90 days	6,055		1.5	%	(191		)	1.6	%	8,022		2.3	%	(380		)	2.9	%
> 90 days	25,277		6.2	%	(11,176		)	96.4	%	27,099		7.7	%	(11,126		)	84.2	%
Total	$	408,842	100.0	%	$	(11,598	)	100.0	%	$	354,066	100.0	%	$	(13,229	)	100.1	%

Financial Liabilities



	December 31, 2016
	Carrying Value		Fair value

	(in thousands)
Trade payables	$	365,788	$	365,788
Other taxes	44,831		44,831
Employee-related payables	55,874		55,874
Other current liabilities	30,221		30,221
Financial liabilities	85,580		85,580
of which derivative financial instruments	1,968		1,968
Total	$	582,294	$	582,294



	March 31, 2017
	Carrying Value		Fair value

	(in thousands)
Trade payables	$	295,602	$	295,602
Other taxes	41,414		41,414
Employee-related payables	53,862		53,862
Other current liabilities	35,032		35,032
Financial liabilities	87,018		87,018
of which derivative financial instruments	4,186		$	4,186
Total	$	512,928	$	512,928

Cash and Cash equivalents



	Fair Value Measurement Using
	December 31, 2016		Level 1		Level 2		Level 3
	(in thousands)
Money market funds	$	31,688	$	31,688	$	—	$	—
Interest-bearing bank deposits	88,091		—		88,091		—
Cash and cash equivalents	150,538		150,538		—		—
Total Cash and cash equivalents	$	270,317	$	182,226	$	88,091	$	—

Fair Value Measurements Using
June 30, 2016
Level 1
Level 2
Level 3
(in thousands)
Money market funds $ 84,008
$ 84,008
$ —
$ —
Interest-bearing bank deposits 132,825
—
132,825
—
Cash 160,574
160,574
—
—
Derivative instruments 151
—
151
—
Total assets measured at fair value $ 377,558
$ 244,582
$ 132,976
$ —



	Fair Value Measurement Using
	March 31, 2017		Level 1		Level 2		Level 3
	(in thousands)
Money market funds	$	—	$	—	$	—	$	—
Interest-bearing bank deposits	87,377		—		87,377		—
Cash and cash equivalents	216,436		216,436		—		—
Total Cash and cash equivalents	$	303,813	$	216,436	$	87,377	$	—

The short-term investments included investments in money market funds and interest–bearing bank deposits which met ASC 230—Statement of Cash flows criteria: short-term, highly liquid investments, for which the risks of changes in value are considered to be insignificant.

Note 4. Trade Receivables

The following table shows the breakdown in trade receivables net book value for the presented periods:


							December 31, 2016			March 31, 2017
	December 31, 2015			June 30, 2016
	(in thousands)						(in thousands)
Trade accounts receivables	$	267,845		$	276,574		$	408,842		$	354,066
(Less) Allowance for doubtful accounts	(6,264		)	(10,138		)	(11,598		)	(13,229		)
Net book value at end of period	$	261,581		$	266,436		$	397,244		$	340,837

Changes in allowance for doubtful accounts are summarized below:


							2016			2017
	2015			2016
	(in thousands)						(in thousands)
Balance at January 1	$	(3,930	)	$	(6,264	)	$	(6,264	)	$	(11,598	)
Allowance for doubtful accounts	(1,363		)	(4,652		)	(906		)	(3,686		)
Reversal of provision	159			806			366			2,142
Change in consolidation scope	(135		)	—
Currency translation adjustment	208			(28		)	(147		)	(87		)
Balance at June 30	$	(5,061	)	$	(10,138	)
Balance at March 31							$	(6,951	)	$	(13,229	)

The change in allowance for doubtful accounts for the first quarter of 2017 related mainly to increased business with categories of clients associated with a higher credit risk.

Note 5. Other Current Assets

The following table shows the breakdown in other current assets net book value for the presented periods:


					December 31, 2016		March 31, 2017
	December 31, 2015		June 30, 2016
	(in thousands)				(in thousands)
Prepayments to suppliers	$	2,774	$	7,122	$	2,439	$	4,114
Employee-related receivables	94		153
Other debtors					3,263		2,816
Prepaid expenses	9,475		12,296		13,638		15,842
Other debtors	3,687		3,442
Derivative instruments	—		151
Gross book value at end of period	16,030		23,164		19,340		22,772
(Less) Allowance for doubtful accounts	—		—
Net book value at end of period	$	16,030	$	23,164	$	19,340	$	22,772

Prepaid expenses mainly consist of office ~~rental advance payments.~~rentals.

Note 6. Intangible assets ~~and Goodwill~~

~~Intangible assets~~

~~There have been no significant~~The main changes in intangible assets since December 31, ~~2015.~~ 2016 relate to purchase accounting adjustments to technology and customer relationships regarding HookLogic, which were identified as intangible assets further to the preliminary purchase price allocation. A change in this preliminary valuation may also impact the income tax related accounts. The amounts shown below may change in the near term as management continues to assess the fair value of acquired assets and liabilities within the twelve-month purchase price allocation period.



	December 31, 2016			March 31, 2017

	Weighted-Average Useful Lives (Years)	Amounts recognized as of Acquisition Date (in millions)		Weighted-Average Useful Lives (Years)	Amounts recognized as of Acquisition Date (in millions)
Technology	3-5 years	24.4		3 years	15.3
Customer relationships	5-9 years	$	60.0	9 years	$	77.7
Total identifiable intangible assets acquired		$	84.4		$	93.0

In addition, no triggering events have occurred which would indicate impairment in the balance of ~~either~~ intangible ~~assets or goodwill.~~assets.

The estimated amortization expense related to intangible assets for the next five years and thereafter is as follows:


	Software		Technology and customer relationships		Total		Software		Technology and customer relationships		Total
Remainder of 2016	$	2,088	$	1,656	$	3,744
2017	3,765		2,253		6,018
From April 1, to December 31, 2017							$	4,436	$	12,207	$	16,643
2018	3,157		1,950		5,107		5,246		16,122		21,368
2019	1,486		244		1,730		3,091		14,148		17,239
2020	571		—		571		1,278		8,628		9,906
2021							389		8,628		9,017
Thereafter	—		—		—		—		33,789		33,789
Total	$	11,067	$	6,103	$	17,170	$	14,440	$	93,522	$	107,962

Note 7. Goodwill

~~On May~~



	Goodwill
	(in thousands)
Balance at January 1, 2017	209,418
Additions to goodwill	22,327
Currency translation adjustment	393
Balance at March 31, 2017	$	232,138

The main changes in goodwill since December 31, 2016 ~~we acquired all~~relate to purchase accounting adjustments to intangible assets regarding HookLogic, further to the preliminary purchase price allocation (note 6).

In addition, no triggering events have occurred which would indicate impairment in the balance of the outstanding shares of Monsieur Drive S.A.S., a Paris-based company building advertising products for the consumer packaged goods vertical. The total consideration paid was $5.1 million (€4.6 million) for the acquisition of the shares, financed by the available cash resources at the acquisition date. This business combination will be accounted for under the acquisition method in accordance with ~~ASC 805 – Business Combinations~~. The determination of the fair value of assets acquired and liabilities assumed is in progress and the impact of the transaction will be reflected in our consolidated financial statements as of December 31, 2016. The preliminary goodwill as of June 30, 2016 is $5.0 million (€4.5 million). Acquisition costs amounting to $0.1 million (€0.1 million) were fully expensed as incurred.

goodwill.

Note 7.8. Other Current Liabilities

Other current liabilities are presented in the following table:


					December 31, 2016		March 31, 2017
	December 31, 2015		June 30, 2016
	(in thousands)				(in thousands)
Clients' prepayments	$	6,244	$	7,604	$	9,176	$	12,816
Accounts payable relating to capital expenditures	8,037		12,787		15,484		10,657
Other creditors	1,091		836		$	2,440	$	10,232
Deferred revenue	159		304		$	3,121	$	1,327
Total	$	15,531	$	21,531	$	30,221	$	35,032

Note 8.9. Financial Liabilities

The changes in current and non-current financial liabilities during the period ended ~~June 30,~~March 31, 2016 are illustrated in the following schedules:


																		As of January 1, 2017		New borrowings		Repayments			Change in scope		Other ⁽¹⁾			Currency translation adjustment		As of March 31, 2017
	As of January 1, 2016		New borrowings		Repayments			Change in scope		Other ⁽¹⁾			Currency translation adjustment			As of June 30, 2016
	(in thousands)																	(in thousands)
Borrowings	$	5,973	$	3,197	$	(3,979	)	$	—	$	432		$	(61	)	$	5,562	$	5,524	$	—	$	(2,053	)	$	—	$	76,546		$	52	$	80,069
Financial liabilities relating to finance leases	23		—		(24		)	—		—			1			—
Other financial liabilities	608		—		(171		)	—		—			12			449		477		—		(241		)	—		(96		)	3		143
Derivative instruments	552		—		—			—		(567		)	15			—		1,968		—		—			—		2,181			37		4,186
Current portion	7,156		3,197		(4,174		)	—		(135		)	(33		)	6,011		7,969		—		(2,294		)	—		78,631			92		84,398
Borrowings	3,272		—		—			—		(432		)	67			2,907		77,397		—		—			—		(76,546		)	1,096		1,947
Financial liabilities relating to finance leases	—		—		—			—		—			—			—
Other financial liabilities	—		—		—			—		—			—			—		214		360		—			—		99			—		673
Non current portion	3,272		—		—			—		(432		)	67			2,907		77,611		360		—			—		(76,447		)	1,096		2,620
Borrowings	9,245		3,197		(3,979		)	—		—			6			8,469		82,921		—		(2,053		)	—		—			1,148		82,016
Financial liabilities relating to finance leases	23		—		(24		)	—		—			1			—
Other financial liabilities	608		—		(171		)	—		—			12			449		691		360		(241		)	—		3			3		816
Derivative instruments	552		—		—			—		(567		)	15			—		1,968		—		—			—		2,181			37		4,186
Total	$	10,428	$	3,197	$	(4,174	)	$	—	$	(567	)	$	34		$	8,918	$	85,580	$	360	$	(2,294	)	$	—	$	2,184		$	1,188	$	87,018

⁽¹⁾Includes reclassification from non-current to current portion based on maturity of the financial liabilities.

Borrowings are financial liabilities at amortized cost and are measured using level 2 fair value measurements.

We are party to several loan agreements and revolving credit facilities, or RCF, with Le Credit Lyonnais, or LCL, Bpifrance Financement (French Public Investment Bank), HSBC as well as with a bank syndicate composed of Natixis (coordinator and documentation agent), LCL (facility agent), HSBC France, Société Générale Corporate & Investment Banking and BNP Paribas (each acting individually as bookrunners and mandated lead arrangers).

~~There have been no~~third-party financial institutions. The only changes ~~in the terms of our loan agreement and other financial liabilities, including maturity and allocation by currency,~~ from what was disclosed in Note 14 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2015.~~2016 are the amendment to the revolving credit facility entered into in September 2015, which, among other things, increased the facility amount from €250.0 million to €350.0 million and the amendment of the HSBC Chinese RCF which increased the facility amount from RMB 40.0 million to RMB 50.0 million

Note ~~9. Equity awards compensation expense~~10. Share-Based Compensation

The ~~Board~~board of ~~Directors~~directors has been authorized by the general meeting of the shareholders to grant employee warrants (Bons de Souscription de Parts de Créateur d’Entreprise or "BSPCEs"), share options (Options de Souscription d'Actions or "OSAs"), free shares/restricted share units ("RSUs") and non-employee warrants (Bons de Souscription d'Actions or "BSAs").

During the ~~six months ended June 30, 2016,~~first quarter of 2017, there ~~were four grants of RSUs and~~was one grant of ~~OSAs~~RSUs under the Employee Share Option Plan 89 and one grant of BSAs under the Plan E,F, as defined in Note 19 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2015:~~

2016. On January 29, 2016, 33,010 RSUs were granted to senior management subject to achievement of internal performance objectives and continued employment. Based on the assumptions known as of June 30, 2016, we determined share-based compensation expense by applying a probability ratio on performance objectives completion.

~~On February 25, 2016, 181,885 RSUs were granted to Criteo employees subject to continued employment.~~

~~On April 20, 2016, 140,135~~March 1, 2017, 231,460 RSUs were granted to Criteo employees subject to continued employment and ~~9,100~~10,825 BSAs were granted to a board member subject to continued engagement on the board of directors.

~~On June 28, 2016, 1,075,827 RSUs and 429,043 OSAs were granted to Criteo employees subject to continued employment.~~

There have been no changes in the vesting and method of valuation of the BSPCEs, OSAs, RSUs, or BSAs from what was disclosed in Note 19 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2015,~~2016, filed with the SEC on ~~February 29, 2016.~~

March 1, 2017.

Change in Number of ~~BSPCE / OSA / RSU /~~ BSPCE/OSA/RSU/BSA


	OSA/BSPCE		RSU		BSA		Total		OSA/BSPCE		RSU		BSA		Total
Balance at January 1, 2016	6,547,854		1,095,585		154,910		7,798,349
Balance at January 1, 2017									4,960,092		3,243,279		188,125		8,391,496
Granted	429,043		1,430,857		9,100		1,869,000		—		231,460		10,825		242,285
Exercised	(1,055,982	)	—		(12,000	)	(1,067,982	)	(671,993	)	—		(15,440	)	(687,433	)
Forfeited	(315,788	)	(83,026	)	(2,440	)	(401,254	)	(44,597	)	(76,377	)	—		(120,974	)
Expired	—		—		—		—		—		—		—		—
Balance at June 30, 2016	5,605,127		2,443,416		149,570		8,198,113
Balance at March 31, 2017									4,243,502		3,398,362		183,510		7,825,374

Breakdown of the Closing Balance


	OSA/BSPCE		RSU	BSA		OSA/BSPCE		RSU	BSA
Number outstanding	5,605,127		2,443,416	149,570		4,243,502		3,398,362	183,510
Weighted-average exercise price	€	23.36	NA	€	14.96	€	24.67	NA	€	19.68
Number exercisable	2,442,449		NA	110,567		2,326,206		10,460	112,435
Weighted-average exercise price	€	14.92	NA	€	10.03	€	18.69	NA	€	11.76
Weighted-average remaining contractual life of options outstanding, in years	7.7		NA	7.1		7.20		NA	7.13

~~Equity awards compensation expense~~Reconciliation with the Consolidated Statements of Income

Three Months Ended
June 30, 2015 June 30, 2016
(in thousands)
R&D
S&O
G&A
Total
R&D
S&O
G&A
Total
RSUs $ —
$ —
$ —
$ —
$ (1,459 ) $ (1,816 ) $ (1,184 ) $ (4,459 )
Share options / BSPCE (1,162 ) (2,903 ) (1,182 ) (5,247 ) (720 ) (672 ) (1,382 ) (2,774 )
Total share-based compensation (1,162 ) (2,903 ) (1,182 ) (5,247 ) (2,179 ) (2,488 ) (2,566 ) (7,233 )
BSAs —
—
(78 ) (78 ) —
—
(462 ) (462 )
Total equity awards compensation expense $ (1,162 ) $ (2,903 ) $ (1,260 ) $ (5,325 ) $ (2,179 ) $ (2,488 )
$ (3,028 ) $ (7,695 )


																									Three Months Ended
	Six Months Ended																								March 31, 2016												March 31, 2017
	June 30, 2015												June 30, 2016
	(in thousands)																								(in thousands)
	R&D			S&O			G&A			Total			R&D			S&O			G&A			Total			R&D			S&O			G&A			Total			R&D			S&O			G&A			Total
RSUs	$	—		$	—		$	—		$	—		$	(2,715	)	$	(3,484	)	$	(2,284	)	$	(8,483	)	$	(1,256	)	$	(1,668	)	$	(1,101	)	$	(4,025	)	$	(3,472	)	$	(6,260	)	$	(2,728	)	$	(12,460	)
Share options / BSPCE	(2,640		)	(6,357		)	(2,547		)	(11,544		)	(1,866		)	(2,394		)	(2,771		)	(7,031		)	(1,146		)	(1,722		)	(1,388		)	(4,256		)	(444		)	(450		)	(1,229		)	(2,123		)
Total share-based compensation	(2,640		)	(6,357		)	(2,547		)	(11,544		)	(4,581		)	(5,878		)	(5,055		)	(15,514		)	(2,402		)	(3,390		)	(2,489		)	(8,281		)	(3,916		)	(6,710		)	(3,957		)	(14,583		)
BSAs	—			—			(98		)	(98		)	—			—			(551		)	(551		)	—			—			(89		)	(89		)	—			—			(357		)	(357		)
Total equity awards compensation expense	$	(2,640	)	$	(6,357	)	$	(2,645	)	$	(11,642	)	$	(4,581	)	$	(5,878	)	$	(5,606	)	$	(16,065	)	$	(2,402	)	$	(3,390	)	$	(2,578	)	$	(8,370	)	$	(3,916	)	$	(6,710	)	$	(4,314	)	$	(14,940	)

Note ~~10.~~11. Financial Income and Expenses

The condensed consolidated statements of income line item “Financial income (expense)” can be broken down as follows:


							Three Months Ended
	Three Months Ended						March 31, 2016			March 31, 2017
	June 30, 2015			June 30, 2016
	(in thousands)						(in thousands)
Financial income from cash equivalents	$	391		$	482		$	388		$	248
Interest and fees							(476		)	(757		)
Interest on debt	(289		)	(612		)	(270		)	(568		)
Fees							(206		)	(189		)
Foreign exchange gain (loss)	(2,654		)	41			$	(1,216	)	$	(1,808	)
Other financial expense	6			(5		)	(13		)	(16		)
Total financial income (expense)	$	(2,546	)	$	(94	)	$	(1,317	)	$	(2,333	)

The ~~$0.1~~$2.3 million financial ~~expense for~~(expense) is driven by the ~~three month period ended June 30, 2016 was mainly the~~interest accrued as a result of ~~a neutral impact of foreign exchange reevaluations and related hedging, partially offset by the recognition of the fees related to~~drawing on the revolving credit facility ~~contracted~~entered into in September ~~2015.~~2015 and the hedging cost related to an intra-group position between Criteo S.A. and its U.S. subsidiary, both in the context of the funding of HookLogic acquisition in November 2016. The ~~$2.5~~$1.3 million financial expense for the three months ended June 30, 2015 included the reevaluation and related hedging of the remaining proceeds from our initial public offering. As of June 30, 2016, the main positions bearing a risk of foreign currency are centralized at the Parent company level and hedged using foreign currency swaps and forward purchases or sales of foreign currencies.

Six Months Ended
June 30,
2015
June 30,
2016
(in thousands)
Financial income from cash equivalents $ 942
$ 870
Interest on debt (459 ) (1,088 )
Foreign exchange gain (loss) 1,036
(1,175 )
Other financial expense (145 ) (19 )
Total financial income (expense) $ 1,374
$ (1,412 )

~~The $1.4 million financial expense for the six months ended June 30,~~March 31, 2016 was mainly a result of the recognition of negative impact of foreign exchange reevaluations and related hedging negative foreign recorded during the first quarter, together with the fees related to the revolving credit facility contracted in September 2015. The $1.4 million financial income for the six months ended June 30, 2015 included the~~positive reevaluation and related hedging~~weakening of the ~~remaining proceeds from our initial public offering. As~~Brazilian Real which resulted in losses on intra-group positions denominated in this currency. At the end of ~~June 30, 2016,~~March 2017, the main positions bearing a ~~risk of~~ foreign currency risk are centralized at the Parent company level and hedged using foreign currency swaps and forward purchases or sales of foreign currencies.

Note ~~11.~~12. Income Taxes

Breakdown of Income Taxes

The condensed consolidated statements of income line item “Provision for income taxes” can be broken down as follows:

Three Months Ended
June 30,
2015
June 30,
2016
(in thousands)
Current income tax $ (3,565 ) $ (7,735 )
France (1,347 ) (5,050 )
International (2,218 ) (2,685 )
Net change in deferred taxes 2,200
3,285
France 980
3,001
International 1,220
284
Provision for income taxes $ (1,365 ) $ (4,450 )


							Three Months Ended
	Six Months Ended						March 31, 2016			March 31, 2017
	June 30, 2015			June 30, 2016
	(in thousands)						(in thousands)
Current income tax	$	(10,678	)	$	(16,818	)	$	(9,082	)	$	(11,071	)
France	(5,934		)	(8,172		)	(3,121		)	(4,572		)
International	(4,744		)	(8,646		)	(5,961		)	(6,499		)
Net change in deferred taxes	2,170			4,424			1,138			6,870
France	949			4,216			1,216			601
International	1,221			208			(78		)	6,269
Provision for income taxes	$	(8,508	)	$	(12,394	)	$	(7,944	)	$	(4,201	)

Our tax provision for interim periods is determined using an estimate of our annual effective tax rate (“AETR”)., adjusted for discrete items arising in that quarter. To calculate our estimated AETR, we estimate our income before taxes and the related tax expense or benefit for the full fiscal year (total of expected current and deferred tax provisions), excluding the effect of significant unusual or infrequently occurring items or comprehensive income items not recognized in the statement of income. Each quarter, we update our estimate of the annual effective tax rate, and if our estimated annual tax rate changes, we make a cumulative adjustment in that quarter. Our quarterly tax provision, and our quarterly estimate of our annual effective tax rate, are subject to significant volatility due to several factors including our ability to accurately predict our income (loss) before provision for income taxes in multiple jurisdictions and the changes in foreign exchange rates. Our effective tax rate in the future will depend on the portion of our profits earned within and outside of France.

For the three months ended March 31, 2016 and 2017, we utilized an annual estimated tax rate of 30% and 29% respectively to calculate the provision for income taxes. The effective tax rate was 30% and 22% for the first quarter 2016 and 2017, respectively. The effective tax rate for three months ended March 31, 2017 decreased compared to the same period in 2016, primarily due to the tax impact of discrete items such as share-based compensation in the United States.

Current tax assets and liabilities

The total amount of current tax assets consists mainly of prepayments of income taxes by Criteo do Brasil LTDA and ~~withholding taxes accountable to future income taxes of~~ Criteo ~~Corp.~~B.V. The current tax liabilities refers mainly to the net corporate tax payables of Criteo S.A., Criteo BVSrl, and Criteo KK.

Note ~~12.~~13. Earnings Per Share

Basic Earnings Per Share

We calculate basic earnings per share by dividing the net income for the period attributable to shareholders of the Parent by the weighted average number of shares outstanding.


	Three Months Ended				Six Months Ended				Three Months Ended
	June 30, 2015		June 30, 2016		June 30, 2015		June 30, 2016		March 31, 2016		March 31, 2017

	(in thousands, except share and per share data)								(in thousands, except share and per share data)

Net income attributable to shareholders of Criteo S.A.	$	3,540	$	12,200	$	16,522	$	29,330	$	17,131	$	12,442
Weighted average number of shares outstanding	61,719,367		63,246,785		61,448,678		62,928,221		62,610,013		64,189,194
Basic earnings per share	$	0.06	$	0.19	$	0.27	$	0.47	$	0.27	$	0.19

Diluted Earnings Per Share

We calculate diluted earnings per share by dividing the net income attributable to shareholders of the Parent by the weighted average number of shares outstanding plus any potentially dilutive shares not yet issued from share-based compensation plans (see ~~note 9)~~Note 10). There were no other potentially dilutive instruments outstanding as of ~~June 30, 2015~~March 31, 2016 and ~~2016.~~2017. Consequently all potential dilutive effects from shares are considered.

For each period presented, a contract to issue a certain number of shares (i.e. share option, non-employee warrant ("BSA"), restricted share unit ("RSU") or non-employee warrant ("BSPCE") is assessed as potentially dilutive if it is “in the money” (i.e., the exercise or settlement price is lower than the average market price).


	Three Months Ended				Six Months Ended				Three Months Ended
	June 30, 2015		June 30, 2016		June 30, 2015		June 30, 2016		March 31, 2016		March 31, 2017

	(in thousands, except share and per share data)								(in thousands, except share and per share data)

Net income attributable to shareholders of Criteo S.A.	$	3,540	$	12,200	$	16,522	$	29,330	$	17,131	$	12,442
Weighted average number of shares outstanding of Criteo S.A.	61,719,367		63,246,785		61,448,678		62,928,221		62,610,013		64,189,194
Dilutive effect of :
Restricted share units ("RSUs")	—		189,980		—		94,990
Share options and employee warrants ("BSPCEs")	3,423,409		2,104,298		3,422,392		2,124,592
Non-employees warrants ("BSAs")	136,835		84,034		141,617		85,135
Restricted share awards									—		1,277,928
Share options and BSPCE									2,144,884		1,722,009
Share warrants									86,237		93,881
Weighted average number of shares outstanding used to determine diluted earnings per share	65,279,611		65,625,097		65,012,687		65,232,938		64,841,134		67,283,012
Diluted earnings per share	$	0.05	$	0.19	$	0.25	$	0.45	$	0.26	$	0.18

The weighted average number of securities that were anti-dilutive for diluted EPS for the periods presented but which could potentially dilute EPS in the future are as follows:

Three Months Ended Six Months Ended

June 30,
2015

June 30,
2016

June 30, 2015
June 30, 2016

Restricted share units ("RSUs") —
134,112
—
502,511
Share options and employee warants ("BSPCEs") 1,069,738
824,858
749,032
412,429
Non-employees warrants ("BSAs") 25,630
—
12,815
—
Weighted average number of anti-dilutive securities excluded from diluted earnings per share 1,095,368
958,970
761,847
914,940



	Three Months Ended
	March 31, 2016	March 31, 2017

Restricted share awards	1,038,691	229,730
Share options and BSPCE	—	442,910
Share warrants	—	—
Weighted average number of anti-dilutive securities excluded from diluted earnings per share	1,038,691	672,640

Note ~~13.~~14. Commitments and contingencies

Commitments

Leases

We are party to various operating lease agreements mainly related to our offices as well as hosting services. Certain of these arrangements have free rent periods or escalating rent payment provisions, and we recognize rent expense under such arrangements on a straight-line basis.

Operating lease expenses relating to our offices totaled ~~$6.7~~$7.4 million and ~~$7.6~~$8.8 million for the ~~three month~~three-month period ended ~~June 30, 2015~~March 31, 2016 and ~~2016, respectively, and $11.6~~2017, respectively.

Operating lease expenses relating to hosting costs totaled $9.3 million and ~~$15.0~~$13.9 million for the ~~six month~~three-month period ended ~~June 30, 2015~~March 31, 2016 and 2016, respectively. Hosting costs totaled $7.1 million and $10.5 million for the three month period ended June 30, 2015 and 2016, respectively and $13.6 million and $19.8 million for the six month period ended June 30, 2015 and 2016,2017, respectively.

Revolving Credit Facilities, Credit Line Facilities and Bank Overdrafts

As mentioned in Note 8,9, we are party to ~~various credit facilities, short~~two RCFs including one with HSBC for which we can draw up to RMB 50.0 million ($7.3 million) and one with a syndicate of banks which allow us to draw up to €350.0 million ($374.2 million), further to the amendment signed in March 2017 increasing the facility amount from €250.0 million to €350.0 million and extending the term ~~credit lines, and overdraft facilities.~~of the contract from 2020 to 2022. As of ~~June 30, 2016, an additional~~March 31, 2017, RMB ~~5.0~~25.0 million ($~~0.7~~3.6 million), and $75.0 million, respectively, had been drawn ~~by Criteo China, our wholly owned subsidiary,~~ on the RMB 40.0 million ($6.0 million)revolving loan facility with HSBC China, increasing the total amount drawn from RMB 25.0 million ($3.8 million) as of December 31, 2015 to RMB 30.0 million ($4.5 million) as of June 30, 2016. Other than this draw, there have been no significant changes in the terms, conditions, or the amounts drawn on these facilities since December 31, 2015.RCFs.

All of these credit facilities are unsecured and contain customary events of default but do not contain any affirmative, financial or negative covenants, with the exception of the ~~€250.0~~€350.0 million ($~~277.6~~374.2 million) ~~revolving credit facility disclosed in note 2 to our consolidated financial statements for the year ended December 31, 2015~~RCF which contains covenants, including compliance with a total net debt to adjusted EBITDA ratio and restrictions on incurring additional indebtedness. At ~~June 30, 2016,~~March 31, 2017, we were in compliance with the required leverage ratio.

Contingencies

Changes in provisions during the presented periods are summarized below:


	Provision for employee related litigation			Provision for tax related litigation			Other provisions			Total			Provision for employee-related litigation			Other provisions		Total
	(in thousands)												(in thousands)
Balance at January 1, 2016	$	236		$	44		$	388		$	668
Balance at January 1, 2017													$	485		$	169	$	654
Charges	444			—			—			444			12			516		528
Provision used	(405		)	—			(40		)	(445		)	(197		)	—		(197		)
Provision released not used	—			(44		)	(345		)	(389		)	(16		)	—		(16		)
Change in consolidation scope	—			—			—			—
Currency translation adjustments	8			—			(3		)	5			6			5		11
Other	—			—			—			—
Balance at June 30, 2016	$	283		$	—		$	—		$	283
Balance at March 31, 2017													$	290		$	690	$	980
- of which current	283			—			—			283			290			690		980
- of which non-current	—			—			—			—

The amount of the provisions represent management’s best estimate of the future outflow. As of ~~June 30, 2016,~~March 31, 2017, provisions are mainly in relation to ~~employee related litigations.~~

employee-related litigations and business and operating risks.

Note ~~14.~~15. Breakdown of Revenue and Non-Current Assets by Geographical Areas

The Company operates in the following three geographical markets:

Americas (North and South America);

EMEA (Europe, Middle-East and Africa); and

Asia-Pacific.

The following tables disclose our consolidated revenue for each geographical area for each of the reported periods. Revenue by geographical area is based on the location of advertisers’ campaigns.

Americas
EMEA
Asia-Pacific
Total
For the three months ended: (in thousands)
June 30, 2015 $ 110,872
$ 126,807
$ 61,627
$ 299,306
June 30, 2016 $ 156,522
$ 153,899
$ 96,780
$ 407,201



	Americas		EMEA		Asia-Pacific		Total
For the three months ended:	(in thousands)

March 31, 2016	$	147,174	$	159,405	$	94,674	$	401,253
March 31, 2017	$	208,013	$	189,092	$	119,562	$	516,667

Revenue generated in France amounted to ~~$27.3~~$32.5 million and ~~$30.9~~$37.5 million for the three months ended ~~June 30, 2015~~March 31, 2016 and ~~2016, respectively.~~

Americas
EMEA
Asia-Pacific
Total
For the six months ended: (in thousands)

June 30, 2015 $ 211,496
$ 259,015
$ 122,967
$ 593,478
June 30, 2016 $ 303,695
$ 313,305
$ 191,454
$ 808,454

~~Revenue generated in France amounted to $57.9 million and $63.4 million for the six months ended June 30, 2015 and 2016,~~2017, respectively.

Revenue generated in other significant countries where we operate is presented in the following table:

Three Months Ended Six Months Ended
June 30, 2015
June 30, 2016
2015
2016
(in thousands)
Americas
United States $ 90,346
$ 134,351
$ 171,007
$ 261,264
EMEA
Germany $ 25,161
$ 30,891
$ 53,607
$ 64,586
United Kingdom $ 26,331
$ 27,230
$ 52,274
$ 55,739
Asia-Pacific
Japan $ 42,255
$ 66,590
$ 86,762
$ 132,564

~~As of June 30, 2015 and 2016, our largest client represented 2.0% and 2.3%, respectively, of our consolidated revenue.~~



	Three Months Ended
	March 31, 2016		March 31, 2017

Americas
United States	$	126,913	$	179,663
EMEA
Germany	$	33,696	$	42,614
United Kingdom	$	28,509	$	28,197
Asia-Pacific
Japan	$	65,973	$	85,310

Other Information

For each reported period, non-current assets (corresponding to the net book value of tangible and intangible assets) are presented in the table below. The geographical information results from the locations of legal entities.

Of which
Of which
Holding
Americas
United States
Europe
Asia-Pacific
Japan
Total
(in thousands)

December 31, 2015 $ 48,160
$ 24,437
$ 23,332
$ 8,847
$ 17,508
$ 7,807
$ 98,952
June 30, 2016 $ 48,893
$ 26,219
$ 25,170
$ 7,601
$ 31,693
$ 10,619
$ 114,406



					Of which						Of which
	Holding		Americas		United States		EMEA		Asia-Pacific		Japan		Total
(in thousands)

December 31, 2016	$	55,052	$	123,308	$	42,474	$	7,132	$	26,033	$	8,965	$	211,525
March 31, 2017	$	58,670	$	134,705	$	133,969	$	7,150	$	22,852	$	7,897	$	223,377

Note ~~15.~~16. Related Parties

There were no significant related-party transactions during the period nor any ~~evolution~~change in the nature of the transactions as described in Note 24 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, ~~2015.~~2016.

Note ~~16.~~17. Subsequent Events

The Company evaluated all other subsequent events that occurred after ~~June 30, 2016~~March 31, 2017 through the date of issuance of the unaudited condensed consolidated financial ~~statements and determined that there~~statements. On April 29, 2017, the Company repaid the outstanding balance of the financial liability related to the RCF contracted in September 2015 ($75 million).There are no other significant events that require adjustments or disclosure.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2015,~~2016, filed with the Securities and Exchange Commission, or "SEC," on ~~February 29, 2016.~~March 1, 2017.

Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies and estimates from the information provided in Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," included in our Annual Report filed on Form 10-K for the year ended December 31, ~~2015.~~2016.

Recently Issued Pronouncements

See "Recently Issued Accounting Standards" under Note 1, "Summary of Significant Accounting Policies," of the Notes to Unaudited Condensed Consolidated Financial Statements for a discussion of certain accounting standards that have been issued during ~~2016.~~2017.

Use of Non-GAAP Financial Measures

This Form 10-Q includes the following financial measures defined as non-GAAP financial measures by the SEC: Revenue ex-TAC, Adjusted EBITDA, ~~and~~ Adjusted Net ~~Income.~~Income 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”~~("TAC") generated over the applicable measurement period and Revenue ex-TAC by Region reflects our Revenue ex-TAC by our core geographies. Revenue ex-TAC, ~~and~~ 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 core business and across our core 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, acquisition-related costs and deferred price consideration. Adjusted EBITDA is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short‑ and long-term operational plans. In particular, we believe that by eliminating equity awards compensation expense, pension service costs, acquisition-related costs and deferred price consideration, Adjusted EBITDA can provide a useful ~~measure~~measures for period-to-period comparisons of our ~~core~~ business. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.

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, and the tax impact of these adjustments. Adjusted Net Income ~~is a~~and Adjusted Net Income per diluted share are key ~~measure~~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 and the tax impact of these adjustments, Adjusted Net Income and Adjusted Net Income per diluted share can provide a useful ~~measure~~measures for period-to-period comparisons of our ~~core~~ business. Accordingly, we believe that Adjusted Net Income ~~provides~~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.

Please refer to the supplemental financial tables provided for a reconciliation of Revenue ex-TAC to ~~Revenue,~~revenue, Adjusted EBITDA to net income, and Adjusted Net Income to net income in each case, the most comparable U.S. GAAP measurement. Our use of non-GAAP financial measures has limitations as an analytical ~~tools,~~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: (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, Adjusted Net Income, 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.

Condensed Consolidated Statements of Income ~~Data (Unaudited):~~Data:


														Three Months Ended
	Three Months Ended						Six Months Ended							March 31, 2016			March 31, 2017
	June 30, 2015			June 30, 2016			June 30, 2015			June 30, 2016
	(in thousands, except share and per share data)												(in thousands, except share and per share data) (unaudited)
Revenue	$	299,306		$	407,201		$	593,478		$	808,454			$	401,253		$	516,667

Cost of revenue ⁽²⁾:
Traffic acquisition costs	(177,239		)	(240,969		)	(353,127		)	(479,724		)		(238,755		)	(306,693		)
Other cost of revenue	(14,243		)	(20,279		)	(27,212		)	(38,618		)		(18,338		)	(27,155		)
Gross profit	107,824			145,953			213,139			290,112				144,160			182,819

Operating expenses
Research and development expenses ⁽²⁾	(19,853		)	(30,235		)	(37,699		)	(57,396		)		(27,162		)	(39,521		)
Sales and operations expenses ⁽²⁾	(59,727		)	(69,225		)	(112,810		)	(133,698		)		(64,473		)	(90,730		)
General and administrative expenses ⁽²⁾	(20,404		)	(28,610		)	(37,950		)	(53,347		)		(24,737		)	(31,516		)
Total operating expenses	(99,984		)	(128,070		)	(188,459		)	(244,441		)		(116,372		)	(161,767		)
Income from operations	7,840			17,883			24,680			45,671				27,788			21,052
Financial income (expense)	(2,546		)	(94		)	1,374			(1,412		)		(1,317		)	(2,333		)
Income before taxes	5,294			17,789			26,054			44,259				26,471			18,719
Provision for income taxes	(1,365		)	(4,450		)	(8,508		)	(12,394		)		(7,944		)	(4,201		)
Net income	$	3,929		$	13,339		$	17,546		$	31,865			$	18,527		$	14,518
Net income available to shareholders of Criteo S.A. ⁽¹⁾	$	3,540		$	12,200		$	16,522		$	29,330			$	17,131		$	12,442
Net income available to shareholders of Criteo S.A. per share:
Basic	$	0.06		$	0.19		$	0.27		$	0.47			$	0.27		$	0.19
Diluted	$	0.05		$	0.19		$	0.25		$	0.45			$	0.26		$	0.18

Weighted average shares outstanding used in computing per share amounts:
Basic	61,719,367			63,246,785			61,448,678			62,928,221				62,610,013			64,189,194
Diluted	65,279,611			65,625,097			65,012,687			65,232,938				64,841,134			67,283,012

⁽¹⁾For the three months ended ~~June 30, 2015~~March 31, 2016 and ~~June 30, 2016,~~March 31, 2017, this excludes ~~$0.4~~$1.4 million and ~~$1.1 million, respectively, and for the six months ended June 30, 2015 and June 30, 2016, this excludes $1.0 million and $2.5~~$2.1 million, respectively, of net income attributable to non-controlling interests held by Yahoo! Japan in our Japanese subsidiary Criteo KK.

⁽²⁾ Cost of revenue and operating expenses include equity awards compensation expense, pension service costs, depreciation and amortization expense, acquisition-related costs and deferred price consideration as follows:

Detailed Information on Selected Items:

Three Months Ended Six Months Ended
June 30,
2015
June 30,
2016
June 30,
2015
June 30,
2016
(in thousands)
Equity award compensation expense
Research and development $ 1,162
$ 2,179
$ 2,640
$ 4,581
Sales and operations 2,903
2,488
6,357
5,878
General and administrative 1,260
3,028
2,645
5,606
Total equity awards compensation expense $ 5,325
$ 7,695
$ 11,642
$ 16,065

Pension service costs
Research and development $ 40
$ 53
$ 81
$ 105
Sales and operations 39
35
78
69
General and administrative 31
43
62
86
Total pension service costs $ 110
$ 131
$ 221
$ 260

Depreciation and amortization expense
Cost of revenue $ 6,813
$ 9,220
$ 12,784
$ 17,439
Research and development ^(a)
1,977
1,457
3,122
3,465
Sales and operations 1,112
2,019
2,104
3,791
General and administrative 376
604
697
1,122
Total depreciation and amortization expense $ 10,278
$ 13,300
$ 18,707
$ 25,817

Acquisition-related costs
General and administrative —
148
—
148
Total acquisition-related costs $ —
$ 148
$ —
$ 148

Acquisition-related deferred price consideration
Research and development 115
44
224
85
Total acquisition-related deferred price consideration $ 115
$ 44
$ 224
$ 85



		Three Months Ended
		March 31, 2016		March 31, 2017
	(in thousands) (unaudited)
Equity awards compensation expense
Research and development expenses		$	2,402	$	3,916
Sales and operations expenses		3,390		6,710
General and administrative expenses		2,578		4,314
Total equity awards compensation expense		$	8,370	$	14,940

Pension service costs
Research and development expenses		52		146
Sales and operations expenses		34		59
General and administrative expenses		43		85
Total pension service costs ^(a)		$	129	$	290

Depreciation and amortization expense
Cost of revenue		8,220		11,091
Research and development expenses ^(b)		2,007		2,944
Sales and operations expenses ^(c)		1,771		4,961
General and administrative expenses		518		1,171
Total depreciation and amortization expense		$	12,516	$	20,167

Acquisition-related costs
General and administrative expenses		—		6
Total acquisition-related costs		$	—	$	6

Acquisition-related deferred price consideration
Research and development expenses		40		—
Total acquisition-related deferred price consideration		$	40	$	—

(a) Effective January 1, 2012, actuarial gains and losses are recognized in other comprehensive income.

(b) Includes acquisition-related amortization of intangible assets of ~~$1.7~~$1.4 million and ~~$0.8~~$2.2 million for the three months ended ~~June 30, 2015~~March 31, 2016 and ~~June 30, 2016, respectively, and $2.6 million and $2.2~~March 31, 2017, respectively.

(c) Includes acquisition-related amortization of intangible assets of $2.5 million for the ~~six~~three months ended ~~June 30, 2015 and June 30, 2016, respectively.~~March 31, 2017.

Consolidated Statements of Financial Position ~~Data (Unaudited):~~Data:


					December 31, 2016		March 31, 2017
	December 31, 2015		June 30, 2016
	(in thousands) (unaudited)				(in thousands) (unaudited)
Cash and cash equivalents	$	353,537	$	377,407	$	270,317	$	303,813
Total assets	841,719		915,416		1,211,186		1,237,389
Trade receivables, net of allowances for doubtful accounts	261,581		266,436		397,244		340,837
Total financial liabilities	10,428		8,918		85,580		87,018
Total liabilities	362,696		363,710		601,309		565,750
Total equity	$	479,023	$	551,706	$	609,877	$	671,639

Other Financial and Operating ~~Data (Unaudited):~~Data:


									Three Months Ended
	Three Months Ended				Six Months Ended				March 31, 2016		March 31, 2017
	June 30, 2015		June 30, 2016		June 30, 2015		June 30, 2016
	(in thousands, except number of clients) (unaudited)								(in thousands) (unaudited)
Number of clients	8,564		11,874		8,564		11,874		10,962		15,423
Revenue ex-TAC ⁽³⁾	$	122,067	$	166,232	$	240,351	$	328,730	$	162,498	$	209,974
Adjusted net income ⁽⁴⁾	$	10,617	$	21,892	$	31,450	$	49,978
Adjusted Net Income ⁽⁴⁾									$	28,086	$	30,821
Adjusted EBITDA⁽⁵⁾	$	23,668	$	39,201	$	55,474	$	88,046	$	48,843	$	56,454

⁽³⁾We define Revenue ex-TAC (Traffic Acquisition Costs) as our revenue excluding traffic acquisition costs, or TAC, generated over the applicable measurement period. Revenue ex-TAC is not a measure calculated in accordance with U.S. GAAP. We have included Revenue ex-TAC in this Form 10-Q 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 TAC from revenue can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Revenue ex-TAC 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 Revenue ex-TAC 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) 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 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 alongside our other U.S. GAAP financial results, including revenue. The following table presents a reconciliation of Revenue ex-TAC to revenue, the most directly comparable U.S. GAAP measure, for each of the periods indicated:


													Three Months Ended
	Three Months Ended						Six Months Ended						March 31, 2016			March 31, 2017
	June 30, 2015			June 30, 2016			June 30, 2015			June 30, 2016
	(in thousands) (unaudited)												(in thousands) (unaudited)
Revenue	$	299,306		$	407,201		$	593,478		$	808,454		$	401,253		$	516,667
Adjustment:
Traffic acquisition costs	(177,239		)	(240,969		)	(353,127		)	(479,724		)	(238,755		)	(306,693		)
Revenue ex-TAC	$	122,067		$	166,232		$	240,351		$	328,730		$	162,498		$	209,974

⁽

⁽⁴⁾⁴⁾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, 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 in this Form 10-Q 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, 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 core 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 financial results, including net income. The following table presents a reconciliation of Adjusted Net Income to net income, the most directly comparable U.S. GAAP measure, for each of the periods indicated:


													Three Months Ended
	Three Months Ended						Six Months Ended						March 31, 2016			March 31, 2017
	June 30, 2015			June 30, 2016			June 30, 2015			June 30, 2016
	(in thousands)												(in thousands) (unaudited)
Net income	$	3,929		$	13,339		$	17,546		$	31,865		$	18,527		$	14,518
Adjustments:
Equity awards compensation expense	5,325			7,695			11,642			16,065			8,370			14,940
Amortization of acquisition-related intangible assets	1,674			825			2,594			2,202			1,377			4,674
Acquisition-related costs	—			148			—			148			—			6
Acquisition-related deferred price consideration	115			44			224			85			40			—
Tax impact of the above adjustments	(426		)	(159		)	(556		)	(387		)	(228		)	(3,317		)
Adjusted net income	$	10,617		$	21,892		$	31,450		$	49,978
Adjusted Net Income													$	28,086		$	30,821

⁽⁵⁾ 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, 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 in this Form 10-Q 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, pension service costs, acquisition-related costs and deferred price consideration in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core 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 other U.S. GAAP financial results, including net ~~income .~~income. The following table presents a reconciliation of Adjusted EBITDA to net income, the most directly comparable U.S. GAAP measure, for each of the periods indicated:


										Three Months Ended
	Three Months Ended				Six Months Ended					March 31, 2016		March 31, 2017
	June 30, 2015		June 30, 2016		June 30, 2015			June 30, 2016
	(in thousands)									(in thousands)
Net income	$	3,929	$	13,339	$	17,546		$	31,865	$	18,527	$	14,518
Adjustments:
Financial expense (income)	2,546		94		(1,374		)	1,412		1,317		2,333
Provision for income taxes	1,365		4,450		8,508			12,394		7,944		4,201
Equity awards compensation expense	5,325		7,695		11,642			16,065		8,370		14,940
Pension service costs	110		131		221			260		129		290
Depreciation and amortization expense	10,278		13,300		18,707			25,817		12,516		20,167
Acquisition-related costs	—		148		—			148		—		6
Acquisition-related deferred price consideration	115		44		224			85		40		—
Total net adjustments	19,739		25,862		37,928			56,181		30,316		41,936
Adjusted EBITDA	$	23,668	$	39,201	$	55,474		$	88,046	$	48,843	$	56,454

Results of Operations for the Periods Ended ~~June 30, 2015~~March 31, 2016 and ~~2016~~2017 (Unaudited)

~~Revenue~~The tables as of March 31, 2017 presented below include the contribution of HookLogic Inc. (acquisition of the company completed on November 9, 2016).

~~Three months ended June 30, 2016 compared to the three months ended June 30, 2015~~Revenue


								Three Months Ended
	Three Months Ended							March 31, 2016		March 31, 2017			2016 vs 2017
	June 30, 2015		June 30, 2016			2015 vs 2016
	(in thousands)							(in thousands)
Revenue as reported	$	299,306	$	407,201		36.0	%	$	401,253	$	516,667		29	%
Conversion impact U.S dollar/other currencies			(4,550		)					3,732
Revenue at constant currency ⁽¹⁾	299,306		402,651			34.5	%	401,253		520,399			30	%
Americas
Revenue as reported	110,872		156,522			41.2	%	147,174		208,013			41	%
Conversion impact U.S dollar/other currencies			1,919							(3,494		)
Revenue at constant currency ⁽¹⁾	110,872		158,441			42.9	%	147,174		204,519			39	%
EMEA
Revenue as reported	126,807		153,899			21.4	%	159,405		189,092			19	%
Conversion impact U.S dollar/other currencies			308							9,063
Revenue at constant currency ⁽¹⁾	126,807		154,207			21.6	%	159,405		198,155			24	%
Asia-Pacific
Revenue as reported	61,627		96,780			57.0	%	94,674		119,562			26	%
Conversion impact U.S dollar/other currencies			(6,777		)					(1,837		)
Revenue at constant currency⁽¹⁾	$	61,627	$	90,003		46.0	%	$	94,674	$	117,725		24	%

⁽¹⁾Growth at constant currency excludes the impact of foreign currency fluctuations and is computed by applying the ~~2015~~2016 average exchange rates for the relevant period to ~~2016~~2017 figures. We have included revenue at constant currency in this Form 10-Q 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.

Revenue for the three months ended ~~June 30, 2016~~March 31, 2017 increased to ~~407.2~~$516.7 million, growing ~~36.0%~~29% (or ~~34.5%~~30% on a constant currency basis), compared to the three months ended ~~June 30, 2015.~~March 31, 2016. Revenue from new clients contributed ~~54.1%~~66.2% to the year-over-year revenue growth, partly driven by the addition of Criteo Sponsored Products in the period, while revenue from existing clients contributed ~~45.9%~~33.8% to the year-over-year revenue growth. This increase in revenue was primarily driven by ~~the~~ continued ~~roll-out of technology innovations~~innovation across ~~all~~ devices, ~~including mobile,~~our broader and improved access to publisher inventory, the addition of ~~a record number of~~over 950 net new clients ~~of over 900 in the quarter,~~across regions and the ~~continued expansion of~~progress we made with our ~~publisher relationships.~~new products Criteo Sponsored Products and Criteo Predictive Search. Technology improvements and broader inventory reach helped generate more revenue ~~per~~from existing ~~client~~clients at constant currency. Our ~~continuing~~ ability to convert and maintain a large portion of our clients to uncapped budgets was ~~also~~ a key driver of the increase in revenue per existing client across large and midmarket clients.

The year-over-year increase was the result of our ~~rapid~~ growth across all ~~geographies.~~regions. Revenue in the Americas region increased ~~41.2%~~41% (or ~~42.9%~~39% on a constant currency basis) to ~~$156.5~~$208.0 million for the three months ended ~~June 30, 2016~~March 31, 2017 compared to the three months ended ~~June 30, 2015,~~March 31, 2016, and the region ~~was~~remained the largest contributor to our global growth. We launched campaigns with new large accounts and our business with existing large clients continued to grow, driven by the continued roll-out of technology innovation. Midmarket growth remained ~~very~~ solid across the ~~region at close to 70% year-over-year despite a demanding hiring environment for sales people. Brazil remained challenging as a result of the difficult political and macro-economic context.~~region. Revenue in ~~the~~ EMEA ~~region~~ increased ~~21.4%~~19% (or ~~21.6%~~24% on a constant currency basis) to ~~$153.9~~$189.1 million for the three months ended ~~June 30, 2016~~March 31, 2017 compared to the three months ended ~~June 30, 2015.~~March 31, 2016. Established markets ~~Germany in particular,~~ continued to post solid ~~growth. We signed several new~~double-digit growth, with strong performance across large and midmarket accounts. Client additions remain a significant driver, in particular among midmarket clients. In addition, large retail and travel clients ~~including a global apparel group based in Spain. Travel clients further expanded~~increased their business with ~~us across many markets in EMEA.~~us. Revenue in the Asia-Pacific region increased ~~57.0%~~26% (or ~~46.0%~~24% on a constant currency basis) to ~~$96.8~~$119.6 million for the three months ended ~~June 30, 2016~~March 31, 2017 compared to the three months ended ~~June 30, 2015. Revenue from new clients was strong, in particular in~~March 31, 2016. Japan and ~~India.~~Korea performed very well across the large and midmarket client categories.

We opened our legal entity in India near the end of the second quarter and signed several large advertisers. These include India’s largest ecommerce marketplace; India’s fashion ecommerce giant Jabong; and MakeMyTrip, India’s largest online travel agent. Growthdelivered solid performance across South-East ~~Asia remains steady~~Asian markets, especially in Vietnam and ~~we continue to make progress in~~Taiwan. And our ~~domestic~~ business ~~in China.~~

with in-app advertisers was particularly strong across the Asia-Pacific markets.

Additionally, our ~~$407.2~~$516.7 million of revenue for the three months ended ~~June 30, 2016~~March 31, 2017 was ~~positively~~negatively impacted by ~~$4.6~~$3.7 million as a result of changes in foreign currency against the U.S. dollar compared to the three months ended ~~June 30, 2015.~~

The year-over-year growth in revenue on a constant currency basis is primarily attributable to an increased volume of clicks delivered on the advertising banners displayed by us (i.e. higher volumes of impressions).

~~Six months ended June 30, 2016 compared to the six months ended June 30, 2015~~

Six Months Ended
June 30, 2015
June 30, 2016
2015 vs 2016
(in thousands)
Revenue as reported $ 593,478
$ 808,454
36.2 %
Conversion impact U.S dollar/other currencies 3,800

Revenue at constant currency ⁽¹⁾
593,478
812,254
36.9 %
Americas
Revenue as reported 211,496
303,695
43.6 %
Conversion impact U.S dollar/other currencies 6,316

Revenue at constant currency ⁽¹⁾
211,496
310,011
46.6 %
EMEA
Revenue as reported 259,015
313,305
21.0 %
Conversion impact U.S dollar/other currencies 5,250

Revenue at constant currency ⁽¹⁾
259,015
318,555
23.0 %
Asia-Pacific
Revenue as reported 122,967
191,454
55.7 %
Conversion impact U.S dollar/other currencies (7,766 )
Revenue at constant currency⁽¹⁾
$ 122,967
$ 183,688
49.4 %

⁽¹⁾Growth at constant currency excludes the impact of foreign currency fluctuations and is computed by applying the 2015 average exchange rates for the relevant period to 2016 figures. We have included revenue at constant currency in this Form 10-Q 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.

Revenue for the six months ended June 30, 2016 increased to $808.5 million, growing 36.2% (or 36.9% on a constant currency basis), compared to the six months ended June 30, 2015. Revenue from new clients contributed 47.6% to the year-over-year revenue growth while revenue from existing clients contributed 52.4% to the year-over-year revenue growth. This increase in revenue was primarily driven by the continued roll-out of technology innovations across all devices, including mobile, the addition of over 1,670 clients, and the continued expansion of our publisher relationships. Technology improvements and broader inventory reach helped generate more revenue per existing client at constant currency across large and midmarket clients. Our continuing ability to convert and maintain a large portion of our clients to uncapped budgets was also a key driver of the increase in revenue per existing client.

The year-over-year increase was the result of our rapid growth across all geographies. Revenue in the Americas region increased 43.6% (or 46.6% on a constant currency basis) to $303.7 million for the six months ended June 30, 2016 compared to the six months ended June 30, 2015, as existing large clients continued to increase their spend with us. We signed several new large clients in the U.S. and our midmarket segment continued its strong growth across the Americas. Revenue in the EMEA region increased 21.0% (or 23.0% on a constant currency basis) to $313.3 million for the six months ended June 30, 2016 compared to the six months ended June 30, 2015, as we saw strong performance in the Travel sector, signed several large and midmarket clients in the region and continued to grow our revenue from existing clients across client segments and markets. Revenue in the Asia-Pacific region increased 55.7% (or 49.4% on a constant currency basis) to $191.5 million for the six months ended June 30, 2016 compared to the six months ended June 30, 2015, as we continued to win new clients, in particular in Japan, South-East Asia, and India.

Additionally, our $808.5 million revenue for the six months ended June 30, 2016 was negatively impacted by $3.8 million as a result of changes in foreign currency against the U.S. dollar compared to the six months ended June 30, 2015.March 31, 2016.

Cost of Revenue

~~Three months ended June 30, 2016 compared to the three months ended June 30, 2015~~


								Three Months Ended						% change
	Three Months Ended						% change	March 31, 2016			March 31, 2017			2016 vs 2017
	June 30, 2015			June 30, 2016			2015 vs 2016
	(in thousands, except percentages)							(in thousands, except percentages)
Traffic acquisition costs	$	(177,239	)	$	(240,969	)	36.0%	$	(238,755	)	$	(306,693	)	28%
Other cost of revenue	$	(14,243	)	$	(20,279	)	42.4%	$	(18,338	)	$	(27,155	)	48%
% of revenue	(64.0		)%	(64.2		)%		(64		)%	(65		)%
Gross profit %	36.0		%	35.8		%		36		%	35		%

Cost of revenue for the three months ended ~~June 30, 2016~~March 31, 2017 increased ~~$69.8~~$76.8 million, or ~~36.4%~~ 30%, compared to the three months ended ~~June 30, 2015.~~March 31, 2016. This increase was primarily the result of an increase of ~~$63.7~~$67.9 million, or ~~36.0%~~28% (or ~~34.3%~~29% on a constant currency basis), ~~increase~~ in traffic acquisition costs and a ~~$6.0~~$8.8 million, or ~~42.4%~~48% (or ~~40.5%~~49% on a constant currency basis), increase in other cost of revenue.

The increase in traffic acquisition costs related primarily to an increase of ~~19.8% increase~~30% in the number of impressions we purchased, driven by both publishers with whom we have direct relationships, including the Criteo Publisher Marketplace, and the main real-time bidding exchanges, both global and local. Over the period, the average cost per thousand impressions (or "CPM") ~~increased 13.5%~~decreased by 1.1% (or ~~12.1%~~0.4% on a constant currency basis). The year-over-year increase in average CPM was a function of the improving quality of the inventory as well as the evolving formats of ad units available to us on an individual basis, and was also driven by price dynamics.

The year-over year growth in traffic acquisition costs was the result of our strong growth across all geographies. Traffic acquisition costs in the Americas region increased ~~44.4%~~42% (or ~~46.0%~~40% on a constant currency basis) to ~~$96.5~~$128.9 million for the three months ended ~~June 30, 2016~~March 31, 2017 compared to the three months ended ~~June 30, 2015,~~March 31, 2016, as our purchases of impressions from the main real-time bidding exchanges ~~and the Facebook mobile application~~ increased and we maintained strong direct relationships with large premium publishers. Traffic acquisition costs in ~~the~~ EMEA ~~region~~ increased ~~18.7%~~18% (or ~~19.0%~~24% on a constant currency basis) to ~~$86.8~~$107.6 million for the three months ended ~~June 30, 2016~~March 31, 2017 compared to the three months ended ~~June 30, 2015,~~March 31, 2016, as our purchases of impressions ~~across several markets in the region,~~ from both large publishers with whom we have a direct ~~relationship with~~relationships and the main real-time bidding exchanges ~~increased.~~increased across several markets in the region. Traffic acquisition costs in the Asia-Pacific region increased ~~54.7%~~24% (or ~~43.5%~~22% on a constant currency basis) to ~~$57.6~~$70.2 million for the three months ended ~~June 30, 2016~~March 31, 2017 compared to the three months ended ~~June 30, 2015,~~March 31, 2016, as we ~~significantly~~ increased our purchases of impressions from global and local real-time bidding exchanges to enable and support our rapid development across several markets in ~~South-East Asia ,~~the region, as well as maintained strong relationships with large premium publishers in the region, in particular in Japan.

The increase in other cost of revenue includes a ~~$3.3~~$4.6 million increase in hosting costs, a ~~$2.4~~$2.9 million increase in allocated depreciation and amortization expense and a ~~$0.3 million increase in other cost of sales.~~

~~Six months ended June 30, 2016 compared to the six months ended June 30, 2015~~

Six Months Ended % change
June 30,
2015
June 30,
2016
2015 vs 2016
(in thousands, except percentages)
Traffic acquisition costs $ (353,127 ) $ (479,724 ) 35.9%
Other cost of revenue $ (27,212 ) $ (38,618 ) 41.9%
% of revenue (64.1 )% (64.1 )%
Gross profit % 35.9 % 35.9 %

Cost of revenue for the six months ended June 30, 2016 increased $138.0 million, or 36.3%, compared to the six months ended June 30, 2015. This increase was primarily the result of a $126.6 million, or 35.9% (or 36.4% on a constant currency basis), increase in traffic acquisition costs and a $11.4 million, or 41.9% (or 41.9% on a constant currency basis), increase in other cost of revenue.

The increase in traffic acquisition costs related primarily to an increase of 20.5% increase in the number of impressions we purchased, driven by both publishers with whom we have direct relationships, including the Criteo Publisher Marketplace, and the main real-time bidding exchanges, both global and local. Over the period, the average cost per thousand impressions (or CPM) increased 12.8% (or 12.7% on a constant currency basis). The year-over-year increase in average CPM was a function of the improving quality of the inventory as well as the evolving formats of ad units available to us on an individual basis, and was also driven by price dynamics.

The year-over year growth in traffic acquisition costs was the result of our strong growth across all geographies. Traffic acquisition costs in the Americas region increased 46.4% (or 49.0% on a constant currency basis) to $187.5 million for the six months ended June 30, 2016 compared to the six months ended June 30, 2015, as our purchases of impressions from the main real-time bidding exchanges and the Facebook mobile application increased and we maintained strong direct relationships with large premium publishers. Traffic acquisition costs in the EMEA region increased 17.6% (or 19.7% on a constant currency basis) to $178.0 million for the six months ended June 30, 2016 compared to the six months ended June 30, 2015, as our purchases of impressions, across several markets in the region, from both large publishers we have a direct relationship with and the main real-time bidding exchanges, increased. Traffic acquisition costs in the Asia-Pacific region increased 55.0% (or 48.5% on a constant currency basis) to $114.2 million for the six months ended June 30, 2016 compared to the six months ended June 30, 2015, as we significantly increased our purchases of impressions from global and local real-time bidding exchanges to enable and support our rapid development across several markets in South-East Asia, as well as maintained strong relationships with large premium publishers in the region, in particular in Japan.

~~The increase in other cost of revenue includes a $6.2 million increase in hosting costs, a $4.7 million increase in allocated depreciation and amortization expense and a $0.7~~$1.3 million increase in other cost of sales, ~~partially offset by a $0.2 million decrease in data acquisition costs.~~

including additional purchases of third-party data.

We consider Revenue ex-TAC as a key measure of our business activity. Our strategy focuses on maximizing the growth of our Revenue ex-TAC on an absolute basis over maximizing our near-term gross margin. We believe this focus builds sustainable long-term value for our business by fortifying a number of our competitive strengths, including access to advertising inventory, breadth and depth of data and continuous improvement of the Criteo Engine’s performance, allowing it to deliver more relevant advertisements at scale. As a part of this focus, we continue to invest in building relationships with direct publishers and pursuing access to leading advertising exchanges. Our performance-based business model provides us with significant control over our level of Revenue ex-TAC margin, which we seek to optimize in order to maximize Revenue ex-TAC growth on an absolute basis in accordance with our strategic focus.

Research and Development Expenses

~~Three months ended June 30, 2016 compared to the three months ended June 30, 2015~~


								Three Months Ended						% change
	Three Months Ended						% change	March 31, 2016			March 31, 2017			2016 vs 2017
	June 30, 2015			June 30, 2016			2015 vs 2016
	(in thousands, except percentages)							(in thousands, except percentages)
Research and development expenses	$	(19,853	)	$	(30,235	)	52.3%	$	(27,162	)	$	(39,521	)	46%
% of revenue	(6.6		)%	(7.4		)%		(7		)%	(8		)%

Research and development ~~expense~~expenses for the three months ended ~~June 30, 2016~~March 31, 2017 increased ~~$10.4~~$12.4 million, or ~~52.3%~~46%, compared to the three months ended ~~June 30, 2015.~~March 31, 2016. This increase was ~~primarily~~ the result of a growth in headcount to ~~466~~602 employees resulting in ~~$8.5~~$11.0 million of additional expense, a $0.6 million increase in subcontracting and other headcount-related costs, a $1.1 million increase in allocated rent and facilities costs, and a $0.7 million increase in consulting and professional fees, partially offset by a $0.5 million decrease in amortization and depreciation of assets.

~~Six months ended June 30, 2016 compared to the six months ended June 30, 2015~~

Six Months Ended % change
June 30, 2015
June 30, 2016
2015 vs 2016
(in thousands, except percentages)
Research and development expenses $ (37,699 ) $ (57,396 ) 52.2%
% of revenue (6.4 )% (7.1 )%

Research and development expense for the six months ended June 30, 2016 increased $19.7 million, or 52.2%, compared to the six months ended June 30, 2015. This increase was primarily the result of a growth in headcount to 466 employees resulting in $14.7 million of additional expense, a $1.6 million increase in subcontracting and other headcount-related costs, a $2.2 million increase in allocated rent and facilities costs, a $0.3 million increase in amortization and depreciation of assets, a $0.8 million increase in consulting and professional fees and a $0.5 million increase in other costs, partially offset by a $0.4 million increase in the French Research Tax Credit.

~~Sales and Operations Expenses~~

~~Three months ended June 30, 2016 compared to the three months ended June 30, 2015~~

Three Months Ended % change
June 30, 2015
June 30, 2016
2015 vs 2016
(in thousands, except percentages)
Sales and operations expenses $ (59,727 ) $ (69,225 ) 15.9%
% of revenue (20.0 )% (17.0 )%

Sales and operations expense for the three months ended June 30, 2016 increased $9.5 million, or 15.9%, compared to the three months ended June 30, 2015. This increase was primarily the result of a growth in headcount to 1,259 employees resulting in $5.3 million of additional expense, a $0.7 million increase in marketing events, a $0.9 million increase in allocated depreciation and amortization expense, a $0.8 million increase in allocated rent and facilities costs, a $2.7 million increase in provisions for doubtful receivables, partially offset by a $0.9 million decrease in other costs.

~~Six months ended June 30, 2016 compared to the six months ended June 30, 2015~~

Six Months Ended % change
June 30, 2015
June 30, 2016
2015 vs 2016
(in thousands, except percentages)
Sales and operations expenses $ (112,810 ) $ (133,698 ) 18.5%
% of revenue (19.0 )% (16.5 )%

Sales and operations expense for the six months ended June 30, 2016 increased $20.9 million, or 18.5%, compared to the six months ended June 30, 2015. This increase was primarily the result of a growth in headcount to 1,259 employees resulting in $12.4 million of additional expense, a $1.6 million increase in marketing events, a $1.7 million increase in allocated depreciation and amortization expense, a $3.3 million increase in allocated rent and facilities costs, and a $2.6 million increase in provisions for doubtful receivables, partially offset by a $0.7 million decrease in other costs.

~~General and Administrative Expenses~~

~~Three months ended June 30, 2016 compared to the three months ended June 30, 2015~~

Three Months Ended % change
June 30, 2015
June 30, 2016
2015 vs 2016
(in thousands, except percentages)
General and administrative expenses $ (20,404 ) $ (28,610 ) 40.2%
% of revenue (6.8 )% (7.0 )%

General and administrative expenses for the three months ended June 30, 2016 increased $8.2 million, or 40.2%, compared to the three months ended June 30, 2015. This increase was primarily the result of a growth in headcount to 360 employees resulting in $4.3 million of additional expense, a $2.7 million increase in subcontracting and other headcount-relatedrelated costs, a $0.3 million increase in allocated rent and facilities costs, a $0.9 million increase in amortization and depreciation of assets, a $0.2 million increase in consulting and professional fees and a $0.2 million increase in other costs, partially offset by an increase in the French Research Tax Credit of $0.2 million.

Sales and Operations Expenses



	Three Months Ended						% change
	March 31, 2016			March 31, 2017			2016 vs 2017

	(in thousands, except percentages)
Sales and operations expenses	$	(64,473	)	$	(90,730	)	41%
% of revenue	(16		)%	(18		)%

Sales and operations expense for the three months ended March 31, 2017 increased $26.3 million, or 41%, compared to the three months ended March 31, 2016. This increase was the result of a growth in headcount to 1,549 employees resulting in $18.1 million of additional headcount related costs, a $1.0 million increase in marketing events, a $3.2 million increase in allocated depreciation and amortization expense, ~~and a $0.7 million increase in consulting and professional fees.~~

~~Six months ended June 30, 2016 compared to the six months ended June 30, 2015~~

Six Months Ended % change
June 30, 2015
June 30, 2016
2015 vs 2016
(in thousands, except percentages)
General and administrative expenses $ (37,950 ) $ (53,347 ) 40.6%
% of revenue (6.4 )% (6.6 )%

General and administrative expenses for the six months ended June 30, 2016 increased $15.4 million, or 40.6%, compared to the six months ended June 30, 2015. This increase was primarily the result of a growth in headcount to 360 employees resulting in $10.6 million of additional expense, a $2.9 million increase in subcontracting and other headcount-related costs, a $1.0 million increase in allocated rent and facilities costs, a $1.6 million increase in provisions for doubtful receivables and bad debts, a $0.3 million increase in operating taxes and a $1.1 million in other costs including and increase of $0.6 million consulting and professional fees.

General and Administrative Expenses



	Three Months Ended						% change
	March 31, 2016			March 31, 2017			2016 vs 2017

	(in thousands, except percentages)
General and administrative expenses	$	(24,737	)	$	(31,516	)	27%
% of revenue	(6		)%	(6		)%

General and administrative expenses for the three months ended March 31, 2017 increased $6.8 million, or 27%, compared to the three months ended March 31, 2016. This increase was the result of a growth in headcount to 431 employees resulting in $3.4 million of additional headcount related costs, a $0.4 million increase in allocated rent and facilities costs, a $0.7 million increase in allocated depreciation and amortization expense, ~~and~~ a ~~$0.5~~$2.3 million increase in consulting and professional ~~fees.~~fees .

Financial Income (Expense)

~~Three months ended June 30, 2016 compared to the three months ended June 30, 2015~~


								Three Months Ended						% change
	Three Months Ended						% change	March 31, 2016			March 31, 2017			2016 vs 2017
	June 30, 2015			June 30, 2016			2015 vs 2016
	(in thousands, except percentages)							(in thousands, except percentages)
Financial income (expense)	$	(2,546	)	$	(94	)	(96.3)%	$	(1,317	)	$	(2,333	)	77%
% of revenue	(0.9		)%	—		%		—		%	—		%

Financial ~~income (expense)~~expense for the three months ended ~~June 30, 2016~~March 31, 2017 increased by ~~$2.5~~$1.0 million, or ~~96.3%~~77%, compared to the three months ended ~~June 30, 2015 was mainly~~March 31, 2016, driven by the interest accrued as a result of ~~a neutral impact of foreign exchange reevaluations and related hedging, partially offset by the recognition of the fees related to~~drawing on the revolving credit facility ~~contracted~~entered into in September ~~2015.~~2015 and the hedging cost related to an intra-group position between Criteo S.A. and its U.S. subsidiary, both in the context of the funding of HookLogic acquisition in November 2016. The ~~$2.5~~$1.3 million financial expense for the three months ended June 30, 2015 included the reevaluation and related hedging of the remaining proceeds from our initial public offering. At the end of June 2016, the main positions bearing a risk of foreign currency are centralized at the Parent company level and hedged using foreign currency swaps and forward purchases or sales of foreign currencies.

~~Six months ended June 30, 2016 compared to the six months ended June 30, 2015~~

Six Months Ended % change
June 30, 2015
June 30, 2016
2015 vs 2016
(in thousands, except percentages)
Financial income (expense) $ 1,374
$ (1,412 ) (202.8)%
% of revenue 0.2 % (0.2 )%

Financial income (expense) for the six months ended June 30, 2016 decreased by $2.8 million, or 202.8%, compared to the six months ended June 30, 2015. The $1.4 million financial expense for the six months ended June 30,March 31, 2016 was mainly a result of the recognition of negative impact of foreign exchange reevaluations and related hedging negative foreign recorded during the first quarter, together with the fees related to the revolving credit facility contracted in September 2015. The $1.4 million financial income for the six months ended June 30, 2015 included the~~positive reevaluation and related hedging~~weakening of the ~~remaining proceeds from our initial public offering.~~Brazilian Real which resulted in losses on intra-group positions denominated in this currency. At the end of ~~June 2016,~~March 2017, the main positions bearing a ~~risk of~~ foreign currency risk are centralized at the Parent company level and hedged using foreign currency swaps and forward purchases or sales of foreign currencies.

Provision for Income Taxes

~~Three months ended June 30, 2016 compared to~~



	Three Months Ended						% change
	March 31, 2016			March 31, 2017			2016 vs 2017

	(in thousands, except percentages)
Provision for income taxes	$	(7,944	)	$	(4,201	)	(47)%
% of revenue	(2		)%	(1		)%
Effective tax rate	30		%	22		%

For the three months ended ~~June 30, 2015~~

Three Months Ended % change
June 30, 2015
June 30, 2016
2015 vs 2016
(in thousands, except percentages)
Provision for income taxes $ (1,365 ) $ (4,450 ) 226.0%
% of revenue (0.5 )% (1.1 )%
Effective tax rate 25.8 % 25.0 %

~~For the quarter ended June 30, 2015~~March 31, 2016 and ~~2016,~~2017, we utilized an ~~effective~~annual estimated tax rate of ~~25.8%~~30% and ~~25.0%,~~29% respectively to calculate the provision for income taxes. The effective tax rate was 30% and 22% for the first quarter 2016 and 2017, respectively. The effective tax rate for three months ended ~~June 30, 2016~~March 31, 2017 decreased compared to the same period in ~~2015,~~2016, primarily due to ~~a change~~the tax impact of discrete items such as share-based compensation in the geographic mix of our income before taxes, the recognition or reversal of valuation allowance on deferred tax assets mainly related to Criteo Corp. and Criteo do Brasil and the impact of tax deductions on gains resulting from share option exercises by U.K and U.S. residents over the periods.

~~Six months ended June 30, 2016 compared to the six months ended June 30, 2015~~

Six Months Ended % change
June 30, 2015
June 30, 2016
2015 vs 2016
(in thousands, except percentages)
Provision for income taxes $ (8,508 ) $ (12,394 ) 45.7%
% of revenue (1.4 )% (1.5 )%
Effective tax rate 32.7 % 28.0 %

For the six months ended June 30, 2015 and 2016, we utilized an effective tax rate of 32.7% and 28.0% respectively, to calculate the provision for income taxes. The effective tax rate for the six months ended June 30, 2016 decreased compared to the same period in 2015, primarily due to a change in the geographic mix of our income before taxes and the recognition or reversal of valuation allowance on deferred tax assets mainly related to Criteo Corp. and Criteo do Brasil.

United States.

Net Income

~~Three months ended June 30, 2016 compared to the three months ended June 30, 2015~~


								Three Months Ended						% change
	Three Months Ended						% change	March 31, 2016			March 31, 2017			2016 vs 2017
	June 30, 2015			June 30, 2016			2015 vs 2016
	(in thousands, except percentages)							(in thousands, except percentages)
Net income	$	3,929		$	13,339		239.5%	$	18,527		$	14,518		(22)%
% of revenue	1.3		%	3.3		%		5		%	3		%

Net income for the three months ended ~~June 30, 2016 increased $9.4~~March 31, 2017 decreased $4.0 million, or ~~239.5%~~22%, compared to the three months ended ~~June 30, 2015.~~March 31, 2016. This ~~increase~~decrease was the result of the factors discussed above, in particular, a ~~$10.0~~$6.7 million ~~increase~~decrease in income from operations and a ~~$2.5~~$1.0 million ~~increase~~decrease in financial income (expense), partially offset by a ~~$3.1~~$3.7 million increase in provision for income taxes compared to ~~2015.~~

~~Six~~the three months ended ~~June 30, 2016 compared to the six months ended June 30, 2015~~

Six Months Ended % change
June 30, 2015
June 30, 2016
2015 vs 2016
(in thousands, except percentages)
Net income $ 17,546
$ 31,865
81.6%
% of revenue 3.0 % 3.9 %

Net income for the six months ended June 30, 2016 increased $14.3 million, or 81.6%, compared to the six months ended June 30, 2015. This increase was the result of the factors discussed above, in particular, a $21.0 million increase in income from operations, partially offset by a $2.8 million decrease in financial income (expense) and a $3.9 million increase in provision for income taxes compared to 2015.March 31, 2016.

Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region

The following table sets forth our revenue, traffic acquisition costs and Revenue ex-TAC by geographic region, including the Americas (North and South America), Europe, Middle East and Africa, or EMEA, and Asia-Pacific.


		Three Months Ended								Six Months Ended									Three Months Ended
		June 30,								June 30,								Region	March 31, 2016			March 31, 2017			Year over Year Change
	Region	2015			2016			Year over Year Change		2015			2016			Year over Year Change
Revenue:	Revenue:																	Revenue:	(amounts in thousands, except percentages)
	Americas	$	110,872		$	156,522		41	%	$	211,496		$	303,695		44	%	Americas	$	147,174		$	208,013		41	%
	EMEA	126,807			153,899			21	%	259,015			313,305			21	%	EMEA	159,405			189,092			19	%
	Asia-Pacific	61,627			96,780			57	%	122,967			191,454			56	%	Asia-Pacific	94,674			119,562			26	%
	Total	299,306			407,201			36	%	593,478			808,454			36	%	Total	401,253			516,667			29	%

Traffic acquisition costs:	Traffic acquisition costs:																	Traffic acquisition costs:
	Americas	(66,853		)	(96,560		)	44	%	(128,097		)	(187,488		)	46	%	Americas	(90,929		)	(128,867		)	42	%
	EMEA	(73,155		)	(86,820		)	19	%	(151,313		)	(178,006		)	18	%	EMEA	(91,185		)	(107,583		)	18	%
	Asia-Pacific	(37,231		)	(57,589		)	55	%	(73,717		)	(114,230		)	55	%	Asia-Pacific	(56,641		)	(70,243		)	24	%
	Total	(177,239		)	(240,969		)	36	%	(353,127		)	(479,724		)	36	%	Total	(238,755		)	(306,693		)	28	%

Revenue ex-TAC⁽¹⁾:	Revenue ex-TAC⁽¹⁾:																	Revenue ex-TAC⁽¹⁾:
	Americas	44,019			59,962			36	%	83,399			116,207			39	%	Americas	56,245			79,146			41	%
	EMEA	53,652			67,079			25	%	107,702			135,299			26	%	EMEA	68,220			81,509			19	%
	Asia-Pacific	24,396			39,191			61	%	49,250			77,224			57	%	Asia-Pacific	38,033			49,319			30	%
	Total	$	122,067		$	166,232		36	%	$	240,351		$	328,730		37	%	Total	$	162,498		$	209,974		29	%

⁽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 in this Form 10-Q because they are key measures used by our management and board of directors to evaluate operating performance and generate future operating plans. 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 core business. Accordingly, we believe that Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region 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 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 by region to revenue by region. Please also refer to footnote 3 to the Other Financial and Operating Data table in ~~“Item~~"Item 2—Management's Discussion and ~~Analysis”~~Analysis" of this Form 10-Q for a reconciliation of revenue ex-TAC to revenue, the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.

Constant Currency Reconciliation

Information in this Form 10-Q with respect to results presented on a constant currency basis was calculated by applying the ~~2015~~2016 average exchange rates for the relevant period to ~~2016~~2017 figures. We have included information with respect to our results presented 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. Below is a table which reconciles the actual results presented in this section with the results presented on a constant currency basis:


	Three Months Ended								Six Months Ended								Three Months Ended
	June 30,								June 30,								March 31, 2016			March 31, 2017			YoY Change
	2015			2016			YoY Change		2015			2016			YoY Change
	(amounts in thousands, except percentages)																(amounts in thousands, except percentages)
Revenue as reported	$	299,306		$	407,201		36	%	$	593,478		$	808,454		36	%	$	401,253		$	516,667		29	%
Conversion impact U.S. dollar/other currencies				(4,550		)						3,800								3,732
Revenue at constant currency	$	299,306		$	402,651		35	%	$	593,478		$	812,254		37	%	$	401,253		$	520,399		30	%

Traffic acquisition costs as reported	$	(177,239	)	$	(240,969	)	36	%	$	(353,127	)	$	(479,724	)	36	%	$	(238,755	)	$	(306,693	)	28	%
Conversion impact U.S. dollar/other currencies				$	2,852							$	(1,787	)						$	(2,231	)
Traffic Acquisition Costs at constant currency	$	(177,239	)	$	(238,117	)	34	%	$	(353,127	)	$	(481,511	)	36	%	$	(238,755	)	$	(308,924	)	29	%

Revenue ex-TAC as reported	$	122,067		$	166,232		36	%	$	240,351		$	328,730		37	%	$	162,498		$	209,974		29	%
Conversion impact U.S. dollar/other currencies				$	(1,699	)						$	2,013							$	1,501
Revenue ex-TAC at constant currency	$	122,067		$	164,533		35	%	$	240,351		$	330,743		38	%	$	162,498		$	211,475		30	%
Revenue ex-TAC/Revenue as reported	41		%	41		%			40		%	41		%			40		%	41		%

Other cost of revenue as reported	$	(14,243	)	$	(20,279	)	42	%	$	(27,212	)	$	(38,618	)	42	%	$	(18,338	)	$	(27,155	)	48	%
Conversion impact U.S. dollar/other currencies				265								15								(216		)
Other cost of revenue at constant currency	$	(14,243	)	$	(20,014	)	41	%	$	(27,212	)	$	(38,603	)	42	%	$	(18,338	)	$	(27,371	)	49	%

Adjusted EBITDA as reported	$	23,668		$	39,201		66	%	$	55,474		$	88,046		59	%	$	48,843		$	56,454		16	%
Conversion impact U.S. dollar/other currencies				(1,010		)						(113		)						1,168
Adjusted EBITDA at constant currency	$	23,668		$	38,191		61	%	$	55,474		$	87,933		59	%	$	48,843		$	57,622		18	%

Liquidity and Capital Resources

Our principal sources of liquidity are our cash and cash equivalents and cash generated from operating activities.We also benefited to a much lesser extent from the proceeds of the exercise of share options and warrants and expect to continue to do so in the future, as such securities are exercised by holders. We have never declared or paid any cash dividends on our ordinary shares. We do not anticipate paying cash dividends on our equity securities in the foreseeable future and intend to retain all available funds and any future earnings to fund our growth. As discussed in Note 89 to the unaudited condensed consolidated financial statements in Item 1 to this Form 10-Q, we are party to several loan agreements and revolving credit facilities with third-party financial institutions.

Our cash and cash equivalents are invested primarily in demand deposit accounts and money market funds that are currently providing only a minimal return. Our cash and cash equivalents at ~~June 30, 2016~~March 31, 2017 were held for working capital and general corporate purposes, which could include acquisitions, and amounted to ~~$ 377.4~~$303.8 million as of ~~June 2016.~~March 31, 2017. The ~~$23.9~~$33.5 million increase in cash and cash equivalents compared with December 31, ~~2015~~2016 primarily resulted from ~~$38.2~~$44.2 million in cash from operating activities and ~~$13.0~~$11.0 million positive cash flow from financing activities over the period, which was partially offset by the ~~$39.0~~$28.6 million used for investing activities, including ~~$34.5~~$28.2 million in capital ~~expenditures and $5.1 million for the Monsieur Drive acquisition partially offset by a $0.6 million inflow relating to changes in refunds of bank deposits or lease deposits related to old premises.~~expenditures. In addition, the increase in cash includes a ~~$11.7~~$6.9 million positive impact of changes in foreign exchange rates on our cash position over the period. We do not enter into investments for trading or speculative purposes. Our policy is to invest any cash in excess of our immediate requirements in investments designed to preserve the principal balance and provide liquidity. Accordingly, our cash and cash equivalents are invested primarily in demand deposit accounts and money market funds that are currently providing only a minimal return.

Operating and Capital Expenditure Requirements

For the ~~six~~three months ended ~~June 30, 2015~~March 31, 2016 and ~~2016,~~2017, our capital expenditures were ~~$31.2~~$12.1 million and ~~$34.5~~$28.2 million, respectively, primarily related to the acquisition of data center and server equipment as well as furnishing and leasehold improvements of new offices. We believe our existing cash balances will be sufficient to meet our anticipated cash requirements through at least the next 12 months. Our future working capital requirements will depend on many factors, including the rate of our revenue growth, the amount and timing of our investments in personnel and capital equipment, and the timing and extent of our introduction of new products and product enhancements. If our cash and cash equivalents balances and cash flows from operating activities are insufficient to satisfy our liquidity requirements, we may need to raise additional funds through equity, equity-linked or debt financings to support our operations, and such financings may not be available to us on acceptable terms, or at all. We may also need to raise additional funds in the event we determine in the future to effect one or more acquisitions of businesses, technologies, assets or products. If we are unable to raise additional funds when needed, our operations and ability to execute our business strategy could be adversely affected. If we raise additional funds through the incurrence of indebtedness, such indebtedness would have rights that are senior to holders of our equity securities and could contain covenants that restrict our operations. Any additional equity financing will be dilutive to our shareholders.

Off-Balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. In addition, we do not engage in trading activities involving non-exchange traded contracts. We therefore believe that we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.

Historical Cash Flows

The following table sets forth our cash flows for the ~~six month period ended June 30, 2015~~first quarter of 2016 and ~~2016:~~2017:


							Three Months Ended
	Six Months Ended						March 31, 2016			March 31, 2017
	June 30, 2015			June 30, 2016
	(in thousands)						(in thousands)
Cash from operating activities	$	52,946		$	38,181		$	18,907		$	44,238
Cash used in investing activities	$	(56,527	)	$	(38,993	)	$	(11,327	)	$	(28,637	)
Cash from financing activities	$	3,181		$	13,022		$	4,737		$	11,003

Operating Activities

Cash provided by operating activities is primarily impacted by the increase in the number of clients using our solution and by the amount of cash we invest in personnel and infrastructure to support the anticipated growth of our business. Cash provided by operating activities has typically been generated from net income and by changes in our operating assets and liabilities, particularly in the areas of accounts receivable and accounts payable and accrued expenses, adjusted for certain operating items such as depreciation, amortization and share-based compensation, deferred tax assets and income taxes.

For the ~~six~~three months ended ~~June 30, 2016,~~March 31, 2017, net cash provided by operating activities was ~~$38.2~~$44.2 million and consisted of net income of ~~$31.9~~$14.5 million and ~~$59.6~~$41.5 million in adjustments for certain operating items, partially offset by ~~$27.4~~$0.1 million of changes in working capital requirements and ~~$25.9~~$11.7 million of income taxes paid during the first ~~half~~quarter of ~~2016.~~2017. Adjustments for certain operating items primarily consisted of depreciation and amortization expense of ~~$29.5~~$22.3 million, equity awards compensation expense of ~~$16.1~~$14.9 million and ~~$16.9~~$11.1 million of accrued income taxes, partially offset by ~~$4.4~~$6.9 million of changes in deferred tax assets. The ~~$27.4~~$0.1 million decrease in cash resulting from changes in working capital primarily consisted of a ~~$15.2~~$75.0 million decrease in accounts payable ~~resulting from the standardization of the timing of invoice payments, $2.3~~partially offset by a $59.6 million ~~increase~~decrease in accounts receivable, ~~mainly driven by growth in our activity during the period and~~ a ~~$15.8~~$8.3 million ~~increase~~decrease in other current assets including prepaid expenses and ~~VAT~~value-added tax ("VAT") receivables ~~resulting from an increase in our revenue~~ and to a ~~lesser extent, an increase in office rental advance payments. This was partially offset by a $5.9~~$7.1 million increase in accrued expenses such as payroll and payroll related expenses, ~~resulting from an increase in the number of our employees,~~ and VAT ~~payables, driven primarily by an increase in traffic acquisition costs.~~

For the six months ended June 30, 2015, net cash provided by operating activities was $52.9 million and consisted of net income of $17.5 million, $39.5 million in adjustments for certain operating items and $4.8 million of cash provided by working capital, partially offset by $8.9 million of income taxes paid during the first half of 2015. Adjustments for certain operating items primarily consisted of depreciation and amortization expense of $19.2 million, equity awards compensation expense of $11.6 million and $10.7 million of accrued income taxes. The $4.8 million increase in cash resulting from changes in working capital primarily consisted of an increase in operating cash flow due to a $27.6 million increase in accounts payable and a $5.7 million increase in accrued expenses such as payroll and payroll related expenses, resulting from an increase in the number of our employees, and VAT payables, driven primarily by an increase in traffic acquisition costs. This was partially offset by an increase in accounts receivable of $12.6 million, primarily driven by increased revenue during the period as we continue to expand our operations and an increase in the average days outstanding of our accounts receivable. Prepaid expenses, VAT receivables, and other current assets also increased by $15.9 million, primarily the result of an increase in our revenue and, to a lesser extent, an increase in office rental advance payments.

payables.

Investing Activities

Our investing activities to date have consisted primarily of purchases of property and equipment and business acquisitions.

For the ~~six~~three months ended ~~June 30, 2016,~~March 31, 2017, net cash used in investing activities was ~~$39.0~~$28.6 million and consisted of ~~$34.5~~$28.2 million for purchases of property and equipment and ~~$5.1~~a $0.4 million ~~related to the Monsieur Drive acquisition, partially offset by a $0.6 million refund~~ of ~~bank deposits or~~ lease ~~deposits related to old premises.~~

For the six months ended June 30, 2015, net cash used in investing activities was $56.5 million and consisted of $31.2 million for purchases of property and equipment, $20.1 million related to the Datapop acquisition and $5.2 million in bank deposits or lease deposits related to new premises.deposits.

Financing Activities

For the ~~six~~three months ended ~~June 30, 2016,~~March 31, 2017, net cash provided by financing activities was ~~$13.0~~$11.0 million resulting from ~~$15.6~~$12.9 million of share option exercises and ~~$3.1~~$0.1 million of ~~draws on revolving credit facilities,~~other financial liabilities partially offset by ~~$5.6~~$2.1 million for repayment of ~~loans and other financial liabilities.~~loans.

For the six months ended June 30, 2015, net cash provided by financing activities was $3.2 million resulting from $6.4 million of share option exercises and $2.4 million of new loans, which was partially offset by $4.7 million for repayment of loans and $1.0 million of changes in other financial liabilities.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market Risk

We are mainly exposed to foreign currency exchange rate fluctuations. There have been no material changes to our exposure to market risk during the first ~~half~~quarter of ~~2016.~~ 2017.

For a ~~discussion~~description of our ~~exposure to market~~foreign exchange risk, ~~refer to our market risk disclosures set forth in Part II, Item 7A, "Quantitative~~please see "Item 7. Management's Discussion and ~~Qualitative Disclosure About Market risk"~~Analysis of Financial Condition ans Results of Operations - B. Liquidity and Capital Resources" in our Annual Report on Form 10-K for the year ended December 31, ~~2015.~~

~~Credit Risk~~

~~The maximum exposure to credit risk at the end of each reported period is represented by the carrying amount of financial assets, and summarized in the following table:~~

December 31, 2015
June 30, 2016
(in thousands)
Cash and cash equivalents $ 353,537
$ 377,407
Trade receivables, net of allowances 261,581
266,436
Other current assets 16,030
23,164
Non-current financial assets 17,184
17,010
Total $ 648,332
$ 684,017

~~As of December 31, 2015 and June 30, 2016, no customer accounted for 10% or more of trade receivables.~~

We perform ongoing credit evaluations of our customers and do not require collateral. We maintain an allowance for estimated credit losses. During the twelve-month period ended December 31, 2015 and the six-month period ended June 30, 2016, our net change in allowance for doubtful accounts was $2.3 million and $3.9 million, respectively.

~~Trade Receivables~~

~~For each period presented, the aging of trade receivables and allowances for potential losses is as follows:~~

December 31, 2015 June 30, 2016
Gross value % Allowance % Gross value % Allowance %
(in thousands) (in thousands) (in thousands) (in thousands)

Not yet due $ 193,603
72.2 % $ —
— % $ 234,680
84.8 % $ —
— %
0 - 30 days 53,803
20.1 % —
— % 10,964
4.0 % (228 ) 2.2 %
31 - 60 days 8,287
3.1 % —
— % 12,197
4.4 % (406 ) 4.0 %
61 - 90 days 2,574
1.0 % (2 ) — % 4,146
1.5 % (749 ) 7.4 %
> 90 days 9,578
3.6 % (6,262 ) 100.0 % 14,587
5.3 % (8,755 ) 86.4 %
Total $ 267,845
100.0 % $ (6,264 ) 100.0 % $ 276,574
100.0 % $ (10,138 ) 100.0 %

~~Cash and Cash Equivalents~~

~~Our cash and cash equivalents are invested primarily in demand deposit accounts and money market funds that are currently providing only a minimal return.~~

~~Market Risk~~

~~Foreign Currency Risk~~2016.

A 10% increase or decrease of the Pound Sterling, the Euro, the Japanese ~~Yen~~yen or the Brazilian ~~Real~~real against the U.S. ~~Dollar~~dollar would have impacted the Consolidated Statements of Income including non-controlling interests as follows:


											Three Months Ended
	Six Months Ended										March 31, 2016					March 31, 2017
	June 30, 2015					June 30, 2016
	($ in thousands of dollars)										(in thousands)
GBP/USD	+10%		-10%			+10%			-10%		+10%			-10%		+10%		-10%
Net income impact	$	112	$	(112	)	$	(228	)	$	228	$	(82	)	$	82	$	9	$	(9	)


											Three Months Ended
	Six Months Ended										March 31, 2016					March 31, 2017
	June 30, 2015					June 30, 2016
	($ in thousands of dollars)										(in thousands)
BRL/USD	+10%			-10%		+10%		-10%			+10%		-10%			+10%		-10%
Net income impact	$	(384	)	$	384	$	430	$	(430	)	$	154	$	(154	)	$	54	$	(54	)


											Three Months Ended
	Six Months Ended										March 31, 2016					March 31, 2017
	June 30, 2015					June 30, 2016
	($ in thousands of dollars)										(in thousands)
JPY/USD	+10%		-10%			+10%		-10%			+10%		-10%			+10%		-10%
Net income impact	$	199	$	(199	)	$	492	$	(492	)	$	271	$	(271	)	$	403	$	(403	)


											Three Months Ended
	Six Months Ended										March 31, 2016					March 31, 2017
	June 30, 2015					June 30, 2016
	($ in thousands of dollars)										(in thousands)
EUR/USD	+10%		-10%			+10%		-10%			+10%		-10%			+10%		-10%
Net income impact	$	2,397	$	(2,397	)	$	2,827	$	(2,827	)	$	1,684	$	(1,684	)	$	2,401	$	(2,401	)

~~Counter Party~~Credit Risk and Trade receivables

AsFor a description of ~~June 30, 2016, we show a positive net cash position. Since 2012, we have utilized a cash pooling arrangement, reinforcing cash management centralization. Investment~~our credit risk and financing decisions are carried out by our internal treasury function. We only deal with counterparties with high credit ratings. In addition, under our Investment and Risk Management Policy, investments performed by Criteo with a single counterparty shall not exceed 25% oftrade receivables, please see "Note 3. Financial instruments" in the ~~total invested portfolio no matter~~Notes to the ~~rating of such counterparty.~~

Consolidated Financial Statements.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Based on their evaluation as of ~~June 30, 2016,~~March 31, 2017, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective to provide reasonable assurance that (i) the information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and ~~that~~(ii) such information is accumulated and communicated to our management, including our ~~chief executive officer~~Chief Executive Officer and ~~chief financial officer,~~Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in management's evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitation on Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Criteo have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies and procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error of fraud may occur and not be detected.

PART II

Item 1. Legal Proceedings.

On June 13, 2016, we filed a complaint in the Central District of California for damages and injunctive relief against SteelHouse, Inc. (“SteelHouse”), alleging Federal False and/or Misleading Advertising, Fraud, Intentional Interference with Prospective Economic Advantage, Libel, Trade Libel, Unfair Competition under California Business & Professions Code § 17200, and False Advertising under California Business & Professions Code § 17500. In the complaint, we allege that SteelHouse perpetrated a counterfeit click fraud scheme in its business operations, and engaged in false and misleading advertising related to such conduct. On July 1, 2016, we filed a motion for preliminary injunction to enjoin such conduct. On July 25, 2016, SteelHouse filed its Answer and Counterclaims, alleging Federal False and/or Misleading Advertising, False Advertising under California Business & Professions Code § 17500, Unfair Competition under California Business & Professions Code § 17200, Intentional Interference with Contract, and Intentional Interference with Prospective Economic Relations against us. In its counterclaims, SteelHouse alleges that we manufactured click count numbers and interfered with SteelHouse's actual and prospective business relationships. We believe that SteelHouse’s counterclaims are without merit and intend to continue to vigorously prosecute our claims against SteelHouse. Based upon the information currently available, we do not believe that this proceeding will have a material adverse effect on our business, financial condition, results of operations or cash flows.

From time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, financial condition, results of operations or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item 1A. Risk Factors.

You should carefully consider the risks described under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2015.~~2016. These risks and uncertainties are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, also may become important factors that affect us. If any such risks materialize, our business, financial condition and results of operations could be materially harmed and the trading price of our ADSs could decline. These risks are not exclusive and additional risks and uncertainties that we are unaware of, or that we currently believe are not material, also may become important factors that affect us. There have been no material changes to the Risk Factors described in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2015.~~2016.

Item 6. Exhibits.

Exhibit Index

Incorporated by Reference

Exhibit

Description

Schedule/ Form

File

Number

Exhibit

File

Date

Description

Schedule/ Form

File

Number

Exhibit

File

Date

3.1

By-laws (statuts) (English translation)

S-8

333-212722

3.1

July 28, 2016

10.1†

2016 Stock Option Plan (English translation)

8-K

001-36153

10.1

June 30, 2016

10.2†

Amended and Restated 2015 Time-Based Free Share Plan (English translation)

S-8

333-212722

99.3

July 28, 2016

10.3†

Amended and Restated 2015 Performance-Based Free Share Plan (English translation)

8-K

001-36153

10.3

June 30, 2016

4.1

Amendment and Restatement Agreement, dated as of March 29, 2017, by and among Criteo S.A., Criteo Finance S.A.S. and Criteo Corp., as borrowers, BNP Paribas, Crédit Lyonnais (LCL), HSBC France, Natixis and Société Générale Corporate & Investment Banking as arrangers, Natixis as coordinator and documentation agent, Crédit Lyonnais (LCL) as agent, and the financial institutions listed therein as lenders.

8-K

001-36153

4.1

March 30, 2017

10.1†#

Employment Agreement between the registrant and Dan Teodosiu, dated November 20, 2012 (English translation)

10.2†#

Employment Offer Letter between the registrant and Mary (Mollie) Spilman, dated July 30, 2014

31.1#

Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2#

Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*

Certificate of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Labels Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

† Indicates management contract or compensatory plan.

# Filed herewith.

* Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		CRITEO S.A.
		(Registrant)

	By:	/s/ Benoit Fouilland
Date: ~~August 5, 2016~~May 10, 2017	Name:	Benoit Fouilland
	Title:	Chief Financial Officer
		(Principal financial officer and duly authorized signatory)

4743



PART I	FINANCIAL INFORMATION	2
Item 1	Financial Statements	2
	Condensed Consolidated Statements of Financial Position (Unaudited)	2
	Condensed Consolidated Statements of Income (Unaudited)	3
	Condensed Consolidated Statements of Comprehensive Income (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows (Unaudited)	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	2324
Item 3	Quantitative and Qualitative Disclosures About Market Risk	4239
Item 4	Controls and Procedures	4440
PART II	OTHER INFORMATION	4541
Item 1	Legal Proceedings	4541
Item 1A	Risk Factors	4541
Item 6	Exhibits	4642
Signatures		4743



	December 31, 2015
	Carrying Value		Loans and receivables		Assets designated at FVTPL ⁽¹⁾		Fair value
	(in thousands)
Cash and cash equivalents	$	353,537	$	—	$	353,537	$	353,537
Trade receivables, net of allowances	261,581		261,581		—		261,581
Other taxes	29,552		29,552		—		29,552
Other current assets	16,030		16,030		—		16,030
Non-current financial assets	17,184		17,184		—		17,184
Total	$	677,884	$	324,347	$	353,537	$	677,884



	December 31, 2015
	Carrying Value		Amortized Cost		Liabilities designated at FVTPL⁽¹⁾		Fair value
	(in thousands)
Trade payables	$	246,382	$	246,382	$	—	$	246,382
Other taxes	30,463		30,463		—		30,463
Employee-related payables	42,275		42,275		—		42,275
Other current liabilities	15,531		15,531		—		15,531
Financial liabilities	10,428		9,876		552		10,428
Total	$	345,079	$	344,527	$	552	$	345,079



			Fair Value Measurements Using
	December 31, 2015		Level 1		Level 2		Level 3
	(in thousands)
Money market funds	$	54,188	$	54,188	$	—	$	—
Interest-bearing bank deposits	114,127		—		114,127		—
Cash	185,222		185,222		—		—
Total assets measured at fair value	$	353,537	$	239,410	$	114,127	$	—

Derivative instruments	$	552	$	—	$	552	$	—
Total liabilities measured at fair value	$	552	$	—	$	552	$	—