Exhibit 99.2
SUPPLEMENTAL UNAUDITED HISTORICAL CONSOLIDATED QUARTERLY CONDENSED FINANCIAL INFORMATION
The following supplemental unaudited historical consolidated quarterly condensed financial information has been prepared by Criteo S.A. ("Criteo") in connection with the merger (the "Merger") of TBL Holdings, Inc., a wholly owned indirect subsidiary of Criteo ("Merger Sub"), with and into HookLogic, Inc. ("HookLogic"), with HookLogic surviving the merger and becoming a wholly owned indirect subsidiary of Criteo, as contemplated by the Agreement and Plan of Merger (the "Merger Agreement"), dated October 3, 2016, by and among Criteo Corp., Merger Sub, HookLogic and Fortis Advisors LLC, solely in its capacity as the Stockholder Agent. The Merger was completed on November 9, 2016. As used herein, references to "Criteo Sponsored Products" and "CSP" refer to the business of HookLogic and its subsidiaries.
The supplemental unaudited historical consolidated quarterly condensed financial information is derived from HookLogic's unaudited interim consolidated financial statements for the quarters presented and Criteo’s unaudited interim consolidated financial statements for the quarters presented.
The supplemental unaudited historical consolidated quarterly condensed financial information presented below is derived by adding the financial information for Criteo and HookLogic for the periods presented. The supplemental unaudited historical consolidated quarterly condensed financial information does not include any adjustments to the financial statements of Criteo or HookLogic for the quarters presented. The supplemental unaudited historical consolidated quarterly condensed financial information has been prepared for illustrative purposes only, and is not necessarily indicative of the operating results of the combined company had the Merger had been consummated on the date indicated, nor is it necessarily indicative of the results of operations that may be expected for any future period. Criteo and HookLogic may have performed differently had they actually been consolidated during the periods presented.
Consolidated Statement of Income
(U.S. dollars in thousands, except share and per share data)
(unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Three Months Ended |
| | | March 31, 2016 | | June 30, 2016 |
| | | Criteo |
| | CSP (*) |
| | Consolidated |
| | Criteo |
| | CSP (*) |
| | Consolidated |
|
| Revenue | | $ | 401,253 |
|
| $ | 13,182 |
|
| $ | 414,435 |
|
| $ | 407,201 |
|
| $ | 22,963 |
|
| $ | 430,164 |
|
| | | | | | | | | | | | | |
| Cost of revenue | | | | | | | | | | | | |
| Traffic acquisition cost | | (238,755 | ) |
| (8,918 | ) |
| (247,673 | ) |
| (240,969 | ) |
| (15,339 | ) |
| (256,308 | ) |
| Other cost of revenue | | (18,338 | ) |
| (799 | ) |
| (19,137 | ) |
| (20,279 | ) |
| (736 | ) |
| (21,015 | ) |
| | | | | | | | | | | | | |
| Gross profit | | 144,160 |
|
| 3,465 |
|
| 147,625 |
|
| 145,953 |
|
| 6,888 |
|
| 152,841 |
|
| | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | |
| Research and development expenses | | (27,162 | ) |
| (2,042 | ) |
| (29,204 | ) |
| (30,235 | ) |
| (1,844 | ) |
| (32,079 | ) |
| Sales and operations expenses | | (64,473 | ) |
| (3,336 | ) |
| (67,809 | ) |
| (69,225 | ) |
| (4,195 | ) |
| (73,420 | ) |
| General and administrative expenses | | (24,737 | ) |
| (1,605 | ) |
| (26,342 | ) |
| (28,610 | ) |
| (1,686 | ) |
| (30,296 | ) |
| Total Operating expenses | | (116,372 | ) |
| (6,983 | ) |
| (123,355 | ) |
| (128,070 | ) |
| (7,725 | ) |
| (135,795 | ) |
| Income from operations | | 27,788 |
|
| (3,518 | ) |
| 24,270 |
|
| 17,883 |
|
| (837 | ) |
| 17,046 |
|
| Financial income (expense) | | (1,317 | ) |
| (66 | ) |
| (1,383 | ) |
| (94 | ) |
| (71 | ) |
| (165 | ) |
| Income before taxes | | 26,471 |
|
| (3,584 | ) |
| 22,887 |
|
| 17,789 |
|
| (908 | ) |
| 16,881 |
|
| Provision for income taxes | | (7,944 | ) |
| — |
|
| (7,944 | ) |
| (4,450 | ) |
| — |
|
| (4,450 | ) |
| Net Income | | $ | 18,527 |
|
| $ | (3,584 | ) |
| $ | 14,943 |
|
| $ | 13,339 |
|
| $ | (908 | ) |
| $ | 12,431 |
|
| | | | | | | | | | | | | |
| Net income available to shareholders of Criteo S.A. | | $ | 17,131 |
|
| $ | (3,584 | ) |
| $ | 13,547 |
|
| $ | 12,200 |
|
| $ | (908 | ) |
| $ | 11,292 |
|
| Net income available to non-controlling interests | | $ | 1,396 |
|
| $ | — |
|
| $ | 1,396 |
|
| $ | 1,139 |
|
| $ | — |
|
| $ | 1,139 |
|
| | | | | | | | | | | | | |
| Weighted average shares outstanding used in computing per share amounts: | | | | | | | | | | | | |
| Basic | | 62,610,013 |
|
| — |
| 62,610,013 |
|
| 63,246,785 |
|
| — |
| 63,246,785 |
|
| Diluted | | 64,841,134 |
|
| — |
| 64,841,134 |
|
| 65,625,097 |
|
| — |
| 65,625,097 |
|
| | | | | | | | | | | | | |
| Net income allocated to shareholders of Criteo S.A. per share: | | | | | | | | | | | | |
| Basic | | 0.27 |
|
| — |
| 0.22 |
|
| 0.19 |
|
| — |
| 0.18 |
|
| Diluted | | 0.26 |
|
| — |
| 0.21 |
|
| 0.19 |
|
| — |
| 0.17 |
|
(*) CSP : Criteo Sponsored Products, formerly HookLogic.
Consolidated Statement of Income
(U.S. dollars in thousands, except share and per share data)
(unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Three Months Ended |
| | | September 30, 2016 | | December 31, 2016 |
| | | Criteo |
| | CSP (*) |
| | Consolidated |
| | Criteo |
| | CSP (*) |
| | Consolidated(1) |
|
| Revenue | | $ | 423,867 |
|
| $ | 22,559 |
|
| $ | 446,426 |
|
| $ | 521,633 |
|
| $ | 57,969 |
|
| $ | 579,602 |
|
| | | | | | | | | | | | | |
| Cost of revenue | | | | | | | | | | | | |
| Traffic acquisition cost | | (247,310 | ) |
| (15,346 | ) |
| (262,656 | ) |
| (308,989 | ) |
| (42,217 | ) |
| (351,206 | ) |
| Other cost of revenue | | (22,332 | ) |
| (908 | ) |
| (23,240 | ) |
| (23,575 | ) |
| (771 | ) |
| (24,346 | ) |
| | | | | | | | | | | | | |
| Gross profit | | 154,225 |
|
| 6,305 |
|
| 160,530 |
|
| 189,069 |
|
| 14,981 |
|
| 204,050 |
|
| | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | |
| Research and development expenses | | (30,701 | ) |
| (3,674 | ) |
| (34,375 | ) |
| (32,363 | ) |
| (3,815 | ) |
| (36,178 | ) |
| Sales and operations expenses | | (68,164 | ) |
| (4,444 | ) |
| (72,608 | ) |
| (76,406 | ) |
| (5,790 | ) |
| (82,196 | ) |
| General and administrative expenses | | (32,492 | ) |
| (459 | ) |
| (32,951 | ) |
| (30,493 | ) |
| (2,559 | ) |
| (33,052 | ) |
| Total Operating expenses | | (131,357 | ) |
| (8,577 | ) |
| (139,934 | ) |
| (139,262 | ) |
| (12,164 | ) |
| (151,426 | ) |
| Income from operations | | 22,868 |
|
| (2,272 | ) |
| 20,596 |
|
| 49,807 |
|
| 2,817 |
|
| 52,624 |
|
| Financial income (expense) | | (570 | ) |
| (88 | ) |
| (658 | ) |
| 1,426 |
|
| (727 | ) |
| 699 |
|
| Income before taxes | | 22,298 |
|
| (2,360 | ) |
| 19,938 |
|
| 51,233 |
|
| 2,090 |
|
| 53,323 |
|
| Provision for income taxes | | (7,574 | ) |
| — |
|
| (7,574 | ) |
| (13,161 | ) |
| — |
|
| (13,161 | ) |
| Net Income | | $ | 14,724 |
|
| $ | (2,360 | ) |
| $ | 12,364 |
|
| $ | 38,072 |
|
| $ | 2,090 |
|
| $ | 40,162 |
|
| | | | | | | | | | | | | |
| Net income available to shareholders of Criteo S.A. | | $ | 13,539 |
|
| $ | (2,360 | ) |
| $ | 11,179 |
|
| $ | 36,734 |
|
| $ | 2,090 |
|
| $ | 38,824 |
|
| Net income available to non-controlling interests | | $ | 1,185 |
|
| $ | — |
|
| $ | 1,185 |
|
| $ | 1,338 |
|
| $ | — |
|
| $ | 1,338 |
|
| | | | | | | | | | | | | |
| Weighted average shares outstanding used in computing per share amounts: | | | | | | | | | | | | |
| Basic | | 63,628,351 |
|
| — |
| 63,628,351 |
|
| 63,760,491 |
|
| — |
| 63,760,491 |
|
| Diluted | | 65,816,422 |
|
| — |
| 65,816,422 |
|
| 66,184,462 |
|
| — |
| 66,184,462 |
|
| | | | | | | | | | | | | |
| Net income allocated to shareholders of Criteo S.A. per share: | | | | | | | | | | | | |
| Basic | | 0.21 |
|
| — |
| 0.18 |
|
| 0.58 |
|
| — |
| 0.61 |
|
| Diluted | | 0.21 |
|
| — |
| 0.17 |
|
| 0.56 |
|
| — |
| 0.59 |
|
(*) CSP : Criteo Sponsored Products, formerly HookLogic.
(1) Including the contribution of Criteo Sponsored Products business (formerly HookLogic) for the period October 1, 2016 until December 31, 2016.
Reconciliation of Revenue ex-TAC by Region to Revenue by Region
(U.S. dollars in thousands)
(unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Three Months Ended | | Three Months Ended |
| | | | March 31, 2016 | | June 30, 2016 |
| | Region | | Criteo |
| | CSP (*) |
| | Consolidated |
| | Criteo |
| | CSP (*) |
| | Consolidated |
|
| Revenue | | | | | | | | | | | | |
| | Americas | | $ | 147,174 |
|
| $ | 11,882 |
|
| $ | 159,056 |
|
| $ | 156,522 |
|
| $ | 21,545 |
|
| $ | 178,067 |
|
| | EMEA | | 159,405 |
|
| 1,300 |
|
| 160,705 |
|
| 153,899 |
|
| 1,418 |
|
| 155,317 |
|
| | Asia-Pacific | | 94,674 |
|
| — |
|
| 94,674 |
|
| 96,780 |
|
| — |
|
| 96,780 |
|
| | Total | | 401,253 |
| | 13,182 |
| | 414,435 |
| | 407,201 |
| | 22,963 |
| | 430,164 |
|
| | | | | | | | | | | | | | |
| Traffic acquisition costs | | | | | | | | | | |
| | Americas | | (90,929 | ) |
| (8,312 | ) |
| (99,241 | ) |
| (96,560 | ) |
| (14,496 | ) |
| (111,056 | ) |
| | EMEA | | (91,185 | ) |
| (606 | ) |
| (91,791 | ) |
| (86,820 | ) |
| (843 | ) |
| (87,663 | ) |
| | Asia-Pacific | | (56,641 | ) |
| — |
|
| (56,641 | ) |
| (57,589 | ) |
| — |
|
| (57,589 | ) |
| | Total | | (238,755 | ) | | (8,918 | ) | | (247,673 | ) | | (240,969 | ) | | (15,339 | ) | | (256,308 | ) |
| | | | | | | | | | | | | | |
Revenue ex-TAC (1) | | | | | | | | | | |
| | Americas | | 56,245 |
|
| 3,570 |
|
| 59,815 |
|
| 59,962 |
|
| 7,049 |
|
| 67,011 |
|
| | EMEA | | 68,220 |
|
| 694 |
|
| 68,914 |
|
| 67,079 |
|
| 575 |
|
| 67,654 |
|
| | Asia-Pacific | | 38,033 |
|
| — |
|
| 38,033 |
|
| 39,191 |
|
| — |
|
| 39,191 |
|
| | Total | | $ | 162,498 |
| | $ | 4,264 |
| | $ | 166,762 |
| | $ | 166,232 |
| | $ | 7,624 |
| | $ | 173,856 |
|
(*) CSP : Criteo Sponsored Products, formerly HookLogic.
(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 Exhibit 99.2 to Form 8-K because they are key measures used by our management and board of directors to evaluate Criteo's operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the elimination of TAC from revenue and review of these measures by region can provide useful measures for period-to-period comparisons of our core business. Accordingly, we believe that Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; (b) other companies may report Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region or similarly titled measures but define the regions differently, which reduces their effectiveness as a comparative measure; and (c) other companies may report Revenue ex-TAC or similarly titled measures but calculate them differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region alongside our other U.S. GAAP financial results, including revenue. The above table provides a reconciliation of Revenue ex-TAC to revenue and Revenue ex-TAC by Region to revenue by region.
Reconciliation of Revenue ex-TAC by Region to Revenue by Region
(U.S. dollars in thousands)
(unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Three Months Ended | | Three Months Ended |
| | | | September 30, 2016 | | December 31, 2016 |
| | Region | | Criteo |
| | CSP (*) |
| | Consolidated |
| | Criteo |
| | CSP (*) |
| | Consolidated (2) |
|
| Revenue | | | | | | | | | | | | |
| | Americas | | $ | 160,739 |
|
| $ | 20,711 |
|
| $ | 181,450 |
|
| $ | 227,974 |
|
| $ | 52,535 |
|
| $ | 280,509 |
|
| | EMEA | | 157,921 |
|
| 1,848 |
|
| 159,769 |
|
| 182,570 |
|
| 5,434 |
|
| 188,004 |
|
| | Asia-Pacific | | 105,207 |
|
| — |
|
| 105,207 |
|
| 111,089 |
|
| — |
|
| 111,089 |
|
| | Total | | 423,867 |
| | 22,559 |
| | 446,426 |
| | 521,633 |
| | 57,969 |
| | 579,602 |
|
| | | | | | | | | | | | | | |
| Traffic acquisition costs | | | | | | | | | | |
| | Americas | | (97,239 | ) |
| (13,977 | ) |
| (111,216 | ) |
| (138,699 | ) |
| (40,062 | ) |
| (178,761 | ) |
| | EMEA | | (87,092 | ) |
| (1,369 | ) |
| (88,461 | ) |
| (104,026 | ) |
| (2,926 | ) |
| (106,952 | ) |
| | Asia-Pacific | | (62,979 | ) |
| — |
|
| (62,979 | ) |
| (66,264 | ) |
| — |
|
| (66,264 | ) |
| | Total | | (247,310 | ) | | (15,346 | ) | | (262,656 | ) | | (308,989 | ) | | (42,988 | ) | | (351,977 | ) |
| | | | | | | | | | | | | | |
Revenue ex-TAC (1) | | | | | | | | | | |
| | Americas | | 63,500 |
|
| 6,734 |
|
| 70,234 |
|
| 89,275 |
|
| 12,473 |
|
| 101,748 |
|
| | EMEA | | 70,829 |
|
| 479 |
|
| 71,308 |
|
| 78,544 |
|
| 2,508 |
|
| 81,052 |
|
| | Asia-Pacific | | 42,228 |
|
| — |
|
| 42,228 |
|
| 44,825 |
|
| — |
|
| 44,825 |
|
| | Total | | $ | 176,557 |
| | $ | 7,213 |
| | $ | 183,770 |
| | $ | 212,644 |
| | $ | 14,981 |
| | $ | 227,625 |
|
(*) CSP : Criteo Sponsored Products, formerly HookLogic.
(1) Revenue ex-TAC is not a measure calculated in accordance with U.S. GAAP. The above table provides a reconciliation of Revenue ex-TAC to revenue and Revenue ex-TAC by Region to revenue by region.
(2) Including the contribution of Criteo Sponsored Products business (formerly HookLogic) for the period October 1, 2016 until December 31, 2016.
Reconciliation of Adjusted EBITDA to Net Income
(U.S. dollars in thousands)
(unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Three Months Ended |
| | March 31, 2016 | | June 30, 2016 |
| | Criteo |
| | CSP (*) |
| | Consolidated |
| | Criteo |
| | CSP (*) |
| | Consolidated |
|
| Net income | $ | 18,527 |
|
| $ | (3,584 | ) |
| $ | 14,943 |
|
| $ | 13,339 |
|
| $ | (908 | ) |
| $ | 12,431 |
|
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
| Financial (income) expense | 1,317 |
|
| 66 |
|
| 1,383 |
|
| 94 |
|
| 71 |
|
| 165 |
|
| Provision for income taxes | 7,944 |
|
| — |
|
| 7,944 |
|
| 4,450 |
|
| — |
|
| 4,450 |
|
| Equity awards compensation expense | 8,370 |
|
| — |
|
| 8,370 |
|
| 7,695 |
|
| — |
|
| 7,695 |
|
| Research and development | $ | 2,402 |
|
| $ | — |
|
| $ | 2,402 |
|
| $ | 2,179 |
|
| $ | — |
|
| $ | 2,179 |
|
| Sales and operations | 3,390 |
|
| — |
|
| 3,390 |
|
| 2,488 |
|
| — |
|
| 2,488 |
|
| General and administrative | 2,578 |
|
| — |
|
| 2,578 |
|
| 3,028 |
|
| — |
|
| 3,028 |
|
| Pension service costs | 129 |
|
| — |
|
| 129 |
|
| 131 |
|
| — |
|
| 131 |
|
| Research and development | 52 |
|
| — |
|
| 52 |
|
| 53 |
|
| — |
|
| 53 |
|
| Sales and operations | 34 |
|
| — |
|
| 34 |
|
| 35 |
|
| — |
|
| 35 |
|
| General and administrative | 43 |
|
| — |
|
| 43 |
|
| 43 |
|
| — |
|
| 43 |
|
| Depreciation and amortization expense | 12,516 |
|
| 219 |
|
| 12,735 |
|
| 13,300 |
|
| 276 |
|
| 13,576 |
|
| Cost of revenue | 8,220 |
|
| — |
|
| 8,220 |
|
| 9,220 |
|
| — |
|
| 9,220 |
|
| Research and development | 2,007 |
|
| — |
|
| 2,007 |
|
| 1,457 |
|
| (28 | ) |
| 1,429 |
|
| Sales and operations | 1,771 |
|
| — |
|
| 1,771 |
|
| 2,019 |
|
| 4 |
|
| 2,023 |
|
| General and administrative | 518 |
|
| 219 |
|
| 737 |
|
| 604 |
|
| 300 |
|
| 904 |
|
| Acquisition-related costs | — |
|
| — |
|
| — |
|
| 148 |
|
| — |
|
| 148 |
|
| General and administrative | — |
|
| — |
|
| — |
|
| 148 |
|
| — |
|
| 148 |
|
| Acquisition-related deferred price consideration | 40 |
|
| — |
|
| 40 |
|
| 44 |
|
| — |
|
| 44 |
|
| Research and development | 40 |
|
| — |
|
| 40 |
|
| 44 |
|
| — |
|
| 44 |
|
| General and administrative | — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| Total net adjustments | 30,316 |
|
| 285 |
|
| 30,601 |
|
| 25,862 |
|
| 347 |
|
| 26,209 |
|
Adjusted EBITDA (1) | $ | 48,843 |
|
| $ | (3,299 | ) |
| $ | 45,544 |
|
| $ | 39,201 |
|
| $ | (561 | ) |
| $ | 38,640 |
|
(*) CSP : Criteo Sponsored Products, formerly HookLogic.
(1) 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, and acquisition-related costs and deferred price consideration. Adjusted EBITDA is not a measure calculated in accordance with U.S. GAAP. We have included Adjusted EBITDA because it is a key measure used by our management and board of directors to evaluate Criteo's 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 U.S. GAAP financial results, including net income.
Reconciliation of Adjusted EBITDA to Net Income
(U.S. dollars in thousands)
(unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Three Months Ended |
| | September 30, 2016 | | December 31, 2016 |
| | Criteo |
| | CSP (*) |
| | Consolidated |
| | Criteo |
| | CSP (*) |
| | Consolidated (2) |
|
| Net income | $ | 14,724 |
|
| $ | (2,360 | ) |
| $ | 12,364 |
|
| $ | 38,072 |
|
| $ | 2,090 |
|
| $ | 40,162 |
|
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
| Financial (income) expense | 570 |
|
| 88 |
|
| 658 |
|
| (1,426 | ) |
| 727 |
|
| (699 | ) |
| Provision for income taxes | 7,574 |
|
| — |
|
| 7,574 |
|
| 13,161 |
|
| — |
|
| 13,161 |
|
| Equity awards compensation expense | 13,965 |
|
| — |
|
| 13,965 |
|
| 11,520 |
|
| 1,709 |
|
| 13,229 |
|
| Research and development | $ | 4,667 |
|
| $ | — |
|
| $ | 4,667 |
|
| $ | 2,525 |
|
| $ | 335 |
|
| $ | 2,860 |
|
| Sales and operations | 5,143 |
|
| — |
|
| 5,143 |
|
| 4,452 |
|
| 1,364 |
|
| 5,816 |
|
| General and administrative | 4,155 |
|
| — |
|
| 4,155 |
|
| 4,543 |
|
| 10 |
|
| 4,553 |
|
| Pension service costs | 132 |
|
| — |
|
| 132 |
|
| 133 |
|
| — |
|
| 133 |
|
| Research and development | 55 |
|
| — |
|
| 55 |
|
| 52 |
|
| — |
|
| 52 |
|
| Sales and operations | 38 |
|
| — |
|
| 38 |
|
| 37 |
|
| — |
|
| 37 |
|
| General and administrative | 39 |
|
| — |
|
| 39 |
|
| 44 |
|
| — |
|
| 44 |
|
| Depreciation and amortization expense | 14,771 |
|
| 363 |
|
| 15,134 |
|
| 15,940 |
|
| 252 |
|
| 16,192 |
|
| Cost of revenue | 10,406 |
|
| — |
|
| 10,406 |
|
| 10,623 |
|
| — |
|
| 10,623 |
|
| Research and development | 1,640 |
|
| 771 |
|
| 2,411 |
|
| 2,093 |
|
| 14 |
|
| 2,107 |
|
| Sales and operations | 1,813 |
|
| 92 |
|
| 1,905 |
|
| 2,152 |
|
| 2 |
|
| 2,154 |
|
| General and administrative | 912 |
|
| (500 | ) |
| 412 |
|
| 1,072 |
|
| 236 |
|
| 1,308 |
|
| Acquisition-related costs | 1,793 |
|
| — |
|
| 1,793 |
|
| 446 |
|
| 534 |
|
| 980 |
|
| General and administrative | 1,793 |
|
| — |
|
| 1,793 |
|
| 446 |
|
| 534 |
|
| 980 |
|
| Acquisition-related deferred price consideration | 3 |
|
| — |
|
| 3 |
|
| (3 | ) |
| — |
|
| (3 | ) |
| Research and development | 3 |
|
| — |
|
| 3 |
|
| (3 | ) |
| — |
|
| (3 | ) |
| General and administrative | — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| Total net adjustments | 38,808 |
|
| 451 |
|
| 39,259 |
|
| 39,771 |
|
| 3,222 |
|
| 42,993 |
|
Adjusted EBITDA (1) | $ | 53,532 |
|
| $ | (1,909 | ) |
| $ | 51,623 |
|
| $ | 77,843 |
|
| $ | 5,312 |
|
| $ | 83,155 |
|
(*) CSP : Criteo Sponsored Products, formerly HookLogic.
(1) Adjusted EBITDA is not a measure calculated in accordance with U.S. GAAP. The above table provides a reconciliation of Adjusted EBITDA to net income.
(2) Including the contribution of Criteo Sponsored Products business (formerly HookLogic) for the period October 1, 2016 until December 31, 2016.
Reconciliation of Adjusted Net Income to Net Income
(U.S. dollars in thousands except share and per share data)
(unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Three Months Ended |
| | | March 31, 2016 | | June 30, 2016 |
| | | Criteo |
| | CSP (*) |
| | Consolidated |
| | Criteo |
| | CSP (*) |
| | Consolidated |
|
| Net income | | $ | 18,527 |
|
| $ | (3,584 | ) |
| $ | 14,943 |
|
| $ | 13,339 |
|
| $ | (908 | ) |
| $ | 12,431 |
|
| Adjustments: | |
|
|
|
|
|
|
|
|
|
|
|
| Equity awards compensation expense | | 8,370 |
|
| — |
|
| 8,370 |
|
| 7,695 |
|
| — |
|
| 7,695 |
|
| Amortization of acquisition-related intangible assets | | 1,377 |
|
| — |
|
| 1,377 |
|
| 825 |
|
| — |
|
| 825 |
|
| Acquisition-related costs | | — |
|
| — |
|
| — |
|
| 148 |
|
| — |
|
| 148 |
|
| Acquisition-related deferred price consideration | | 40 |
|
| — |
|
| 40 |
|
| 44 |
|
| — |
|
| 44 |
|
| Tax impact of the above adjustments | | (228 | ) |
| — |
|
| (228 | ) |
| (159 | ) |
| — |
|
| (159 | ) |
| Total net adjustments | | 9,559 |
|
| — |
|
| 9,559 |
|
| 8,553 |
|
| — |
|
| 8,553 |
|
Adjusted net income (1) | | $ | 28,086 |
|
| $ | (3,584 | ) |
| $ | 24,502 |
|
| $ | 21,892 |
|
| $ | (908 | ) |
| $ | 20,984 |
|
| | |
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares outstanding | |
|
|
|
|
|
|
|
|
|
|
|
| - Basic | | 62,610,013 |
|
| — |
| 62,610,013 |
|
| 63,246,785 |
|
| — |
| 63,246,785 |
|
| - Diluted | | 64,841,134 |
|
| — |
| 64,841,134 |
|
| 65,625,097 |
|
| — |
| 65,625,097 |
|
| | |
|
|
|
|
|
|
|
|
|
|
|
| Adjusted net income per share | |
|
|
|
|
|
|
|
|
|
|
|
| - Basic | | $ | 0.45 |
|
| $— |
| $ | 0.39 |
|
| $ | 0.35 |
|
| $— |
| $ | 0.33 |
|
| - Diluted | | $ | 0.43 |
|
| $— |
| $ | 0.38 |
|
| $ | 0.33 |
|
| $— |
| $ | 0.32 |
|
(*) CSP : Criteo Sponsored Products, formerly HookLogic.
(1) 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 because it is a key measure used by our management and board of directors to evaluate Criteo's 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-based financial results, including net income.
Reconciliation of Adjusted Net Income to Net Income
(U.S. dollars in thousands except share and per share data)
(unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Three Months Ended |
| | | September 30, 2016 | | December 31, 2016 |
| | | Criteo |
| | CSP (*) |
| | Consolidated |
| | Criteo |
| | CSP (*) |
| | Consolidated (2) |
|
| Net income | | $ | 14,724 |
|
| $ | (2,360 | ) |
| $ | 12,364 |
|
| $ | 38,072 |
|
| $ | 2,090 |
|
| $ | 40,162 |
|
| Adjustments: | |
|
|
|
|
|
|
|
|
|
|
|
| Equity awards compensation expense | | 13,965 |
|
| — |
|
| 13,965 |
|
| 11,520 |
|
| 1,709 |
|
| 13,229 |
|
| Amortization of acquisition-related intangible assets | | 943 |
|
| — |
|
| 943 |
|
| 987 |
|
| — |
|
| 987 |
|
| Acquisition-related costs | | 1,793 |
|
| — |
|
| 1,793 |
|
| 446 |
|
| 534 |
|
| 980 |
|
| Acquisition-related deferred price consideration | | 3 |
|
| — |
|
| 3 |
|
| (3 | ) |
| — |
|
| (3 | ) |
| Tax impact of the above adjustments | | (129 | ) |
| — |
|
| (129 | ) |
| (432 | ) |
| — |
|
| (432 | ) |
| Total net adjustments | | 16,575 |
|
| — |
|
| 16,575 |
|
| 12,518 |
|
| 2,243 |
|
| 14,761 |
|
Adjusted net income (1) | | $ | 31,299 |
|
| $ | (2,360 | ) |
| $ | 28,939 |
|
| $ | 50,590 |
|
| $ | 4,333 |
|
| $ | 54,923 |
|
| | |
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares outstanding | |
|
|
|
|
|
|
|
|
|
|
|
| - Basic | | 63,628,351 |
|
| — |
| 63,628,351 |
|
| 63,760,491 |
|
| — |
| 63,760,491 |
|
| - Diluted | | 65,816,422 |
|
| — |
| 65,816,422 |
|
| 66,184,462 |
|
| — |
| 66,184,462 |
|
| | |
|
|
|
|
|
|
|
|
|
|
|
| Adjusted net income per share | |
|
|
|
|
|
|
|
|
|
|
|
| - Basic | | $ | 0.49 |
|
| $— |
| $ | 0.45 |
|
| $ | 0.79 |
|
| $— |
| $ | 0.86 |
|
| - Diluted | | $ | 0.48 |
|
| $— |
| $ | 0.44 |
|
| $ | 0.76 |
|
| $— |
| $ | 0.83 |
|
(*) CSP : Criteo Sponsored Products, formerly HookLogic.
(1) Adjusted Net Income is not a measure calculated in accordance with U.S. GAAP. The above table provides a reconciliation of Adjusted Net Income to net income.
(2) Including the contribution of Criteo Sponsored Products business (formerly HookLogic) for the period October 1, 2016 until December 31, 2016.
