CRTO - Earnings call 4 2023

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Operator

Good morning, and welcome to Criteo's Fourth Quarter and Fiscal Year 2023 Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Melanie Dambre, Vice President, Investor Relations. Please go ahead.

Melanie Dambre

Good morning, everyone, and welcome to Criteo's Fourth Quarter and Fiscal Year 2023 Earnings Call.

call Officer, Executive to Sarah prepared the and Megan share on remarks. Financial Chief Glickman, us today: Officer, Chief Clarken; some Joining are going Q&A will our us Product Parsons, Officer, Todd for Chief the session. join

As usual, presentation investor the remarks now website call. prepared our well our transcript on as our as and will you find investor after

analytics today. which remind remarks will our we started, reflect judgments, Before Criteo's that get of I you would only assumptions, and forward-looking like statements as to include

Our differ factors based Criteo's undertake by may update actual a business. on do today. to we required expectations results any current from materially discussed forward-looking as number not affecting of obligation law, statements any Except

well please more Forms refer included filed the to and in our performance. recent to with GAAP information, XX-Q release release directly XX-K today. reconciliations and are in our We'll the measures For of as most non-GAAP our comparable published also as Definitions discuss SEC. factors most risk discussed the our earnings earnings metrics

made prior over stated, against in period Finally, unless let same the growth the are call during With Megan. now all hand this to me that, it year. otherwise comparisons

Megan Clarken

during support good in delivered holiday acceleration EBITDA. leans time and us for Thank throughout everyone. In QX, the season of our organic organization today. proud I'm advertising. when clients entire to and we Thanks, you execution and work this and record Melanie, strong with morning, line adjusted the top joining growth our record peak hard team's

AI large-scale resilience for predictions strategies the commerce the our better clients. and business by breakthrough and robust to deliver outperformance was implemented of and our technology outcomes reflects with driven data we've Our

that excited the the done, more I what the achieved, work and Criteo I've We've remarkable so and about we've the proud transformation over our years made started been with back I'm progress. never Looking we've of of company. since began future.

growth in setting crossing direction, the the achieved in we of efforts turnaround. important XXXX. This second performance $X executing double-digit for continued milestone billion to are stage affirms our In the testament to our a is ratios growth ex-TAC company contribution the our XXXX for further mark tireless Our the time. with historic strategic first for XXXX, in while better-than-expected a year consecutive

exceeded target demonstrating EBITDA retargeting also adjusted discipline We surpassed million turnaround. XX% the in executing margin annual year, Retail our our now cost than for our represents $XXX business. and of revenue, less while Media

XXXX targeting, claims the by accelerated commerce momentum, strategic offset With XX% retargeting in has proved in funnel is full targeting move offering to strategy announced our audiences we Our a fourth business successful. in our that quarter. the up

focused to and we leadership side we platform continue called platform push tech carving for as Media and the big position Commerce and Max supply that year we've side needs launch a end-to-end access our differentiation in data are looking for across called choice Commerce clients for. frictionless delivering forward us Media, the laid our position our differentiated out data to allowing flows the built one with out, of our platform offer against was XXXX As We've that platform Commerce capabilities delivery of Commerce Grid. vision on the for Criteo and launch that of demand

excited to sponsored and Connect, display, and data placements, ad more to of ad Mexico, and leading Walmart media billion flowing on-site retail now partnership video than tech remarkable XX% spend, our growth $X.X position to are now which market with in our bolstered with our share launch Among retailers partner activated Criteo scope ever formats globally with we're more more expanded we before. Walgreens a gaining XXXX and the pipes. We through We [indiscernible]. as media others, trusting year-over-year first-party the ad they with surged XXX with provider, in include

In expanded global XX past tripling footprint ex-TAC months. the our retail addition, over presence we our by in

We our partnership more commerce with than and markets, media including companies Uber include in We're double which our budgets like sequentially continue still Japan, Uber ecosystem pleased to to Colombia, expand also to Peru. broadened in QX.

to traction with self-service gain which premium closed-loop our Internet point DSP, on access a and Max gives agencies off-site brands continue measurement. and to across We our open Commerce inventory buy media inventory retail single with sites, X,XXX retailer

funnel we're major the off-site on-site and Max, now increasing and campaigns agencies and of All of seeing Commerce advertising. are full using multi-retailer campaigns adoption holdco across

vehicles, Media hard as our position market a and multiple in scale. drive is off-site kicked work and capitalize largest max national Buy, of off on with We've [indiscernible], momentum [indiscernible], Best budgets. advertising new differentiate, and retailers commerce and media since a XXXX our as Shipt, in growing to to XX ran pipeline. advertising brand Along campaigns the we We Macy's, such pole seen search and in opportunity team to with growth We're QX onboarded unlock powerful building. Retail continues deliver, social, the

for of between a led targeting season commerce the entire marketing existing their AI. by precision including latest can shopper QX, with our which reach clients, delivered is Turning us. scope during to targeting only partnership tactics available our Marketing We and their This our a Internet growth holiday using spend, clients move growth XX% using to capabilities. engagement best-in-class mid- full sixth data broad focuses to funnel funnel successful the targeting activation example in We our see on Criteo the was advertisers media set with open increase consecutive to of in more quarter fast period. with of second targets which that they the driven resulted successful upper and in cyber Commerce full using our spend of holiday funnel, with across close A the performance, Solutions. awareness, and Audience year-over-year allocated [indiscernible] on and expanding advertiser funnel recent Criteo Solution, the

of Audiences success. to single-digit addition our XX% million uplift an retargeting tech ex the drove About our that from to QX, to of a contributing see Furthermore, targeting our AI environments, use solid partnership bring traction in we identifiers for opportunities other comes also from enhancements and spend in are access experiencing which real in range AI-driven in which at our to practice of efforts social high cross-selling we're contribution work. the media further expand with Our ML Meta, Commerce in performance first-party output clients into billions users.

adding scale matching inventory to It's to our first-party cookie-less and Meta's We over few others, run for strategy. The Meta's open on greater our in a call after data other farm Instagram XX% the a has pillars during in which combination with boost in the important work world, sales past addressability offer we've their spend scale. In that are first-party and XX% Super of activating one social increase out precision clients environments, words, Internet. on a on return QX. of in And activation multipronged in started hundreds Facebook sales bear large-scale seeing campaigns campaigns average to in done logged Among fruit. QX. and much and of quarters networks boost experienced data represent advertiser are the ad a inventory when double-digit of at

demand centered a retailers, us XXXX. and thrilled focus driving to won [ roster position We retail at delivering We we Albertsons our our have scale appointments Europe, top scaling into to ]. new Soren continue transformation. more ] on the ]; our time In our and our recently when for against market and components gain year on [ business recently ahead to opportunities to leadership our retailers see further with reinforce including which We're in [ Melanie industry them priorities Turning in expanded to Criteo and share. senior of veterans, further space. platform. are U.S. Zimmerman growth PC join media, as opportunities Stephen this the we continue the exciting leaders Howard in present of We

we our opportunities Criteo start for off exciting chose more and our capabilities, I we're footprint, retail media capabilities see or continuously drive to into platform. enhance should scale and an Albertsons great perform our our map a and say, our to expanded platform's to with With ability spend, them. to with road along demand technical

our bringing signed to global further X Retail to recently multiyear world-leading goal to proud Our driving have is scale. beauty opportunities easy with We're deals buy, to Media brand make in clients and more brands. CPG

combined multiyear as the by We to the agencies brands major represent hundreds also Criteo's our their According partnerships the and millions has is anticipate platform leading our is twofold and Media of and in GroupM, exceed Overall, and with been and come Media Europe XXXX to TV through spend Retail agencies worldwide in fastest-growing U.S. predicted surge of holdco in allocated spend to platform beyond. Retail TV a XX% increase dollars linear connected momentum and sustained with XXXX APAC. by advertising experienced to predicted XXXX. of in

conducted brands sales XX% other brands than effective compared spend expect Retail than and shows more terms is XXXX Media and more a Similarly, spend attract X/X impact of Retail a that more Media recent XX% study globally channels. of of and we say agencies in to of agencies to

as Our platform more from potential retailers unifies and of Media increasingly Further Media. the dollars more full absence legacy channels value the flow third-party first-party supply and of and ad accelerated data and Retail demand the advertises to Retail to activation unleash cookies.

our to third-party our Audience supply we audiences drive offering and With believe we already Commerce their our Commerce established on through more by that and Media across time. portfolio. to XXX DSPs Grid expand with demand Display seeing bring intend to commerce their to top audiences Commerce We're we from activation We're broadly, powered expand Commerce inside drive Google's advertiser opportunities Group, supply more and proprietary to deals over revenue from retailers. more innovation. incremental always at for surface agencies packages excited demand for retailer could to Looking Video Criteo great marketplace scale partnership have

that Commerce We Media forward first-party recently using Grip, look momentum. data completed and our to off-site retailer on we through first building campaign Retail

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Now addressability for we've for advertising been change and multipronged preparing clients strategy to this our comprehensive with a years performance. future-proof

We're of proposed know, Privacy Google for performance met weekly clients proper of setups to over on we've solutions testing the actively related evaluate and our and and First, on all the since worked as to you early very deprecation in users advertising tirelessly with started the with January, Sandbox cookie them the last partners. Chrome's X-month years X mechanisms. ensure involved beginning we're average X% maintain and working that in ensure testing to

and statistical significance. a requires testing rigorous methodology This

broader by expect the move market the forward. them determine third-party U.K. CMA the the for We'll way. results We whether can help to deprecation along also to updates provide cookie deliver to mid-June

several Now durable cookies. tech solely players ID their a on have replace ad to third-party focused efforts using

universal this We us, network. successful supply, media part to owners multipronged tool of it personalization leverage hash marketers refer safe continuity. across our to and is demand and our are facilitating bridge secure measurement. privacy as one identifiers, For data to from sets approach of which first-party just We media

over integrations connect When signals industry more similar e-mail than XXx alternative hatched have publishers, IDs that looking direct from at we scale. with, lack we

data we In with XX integrations clients' first-party about addition, data collaboration activate customer and have audiences. platforms to

retailer focused an sites and and clients on our including consumers we're social data closed helping platforms, environments in as and Instagram. first-party more like Facebook our authenticated Next, reach of strategy, extension and

to we're party and precision the best-in-class us with and diverse facilitate matching deprecation determine Chrome marry to driving other performance third-party our that to for for we advertising today. bring believe and performance cookie-less automatically contextual data using first enables path AI cookie-less our environments these personalized solutions in We clients expectations. cookie optimal environments with clients' These on already meets scale signals prepared

drive We to the continue to clients capabilities identifiers. expand without best for outcomes our third-party our

retailers row. Insider hottest we're companies by of commitment This the for only directly staying retailer the advertisers AI-driven connects one in acknowledgment on proud recognized with industry To to that recently and Internet. conclude, second acknowledged year have sites been drive the reflects platform Open to commerce or publishers a our the to of as ad at tech the forefront our and with unified

last industry are to is goals meaning at focus by aligned and One Paris reduction sustainability callout, our agreement. to targets company but carbon climate approved key report Criteo, in the emissions the science-based a the how targets we're that I'm have with important pleased initiative, first our

and now outlook. As with to disciplined approach it Sarah, value. XXXX, shareholder step into to want laser on will financial to profitable steadfast our a opportunities call our execution, details results capital with sustainable, over that, who And you. remains look provide we I Thank and to on turn allocation growth we'll Sarah. -- that commitment to confident strategy, drive our lay the towards focus forward We're harnessing and ahead. we our in

Sarah Glickman

and We you, double-digit We up was in $XX Solutions, tech EBITDA targeting contribution our highlights time our reflecting new strategies. the year-over-year laser $XXX We by retailers, of and adoption of a expand billion, and financial Starting billion, onetime is of this represents at $XXX was [indiscernible] million, clients' was XX%, revenue billion, invest Revenue results the growth morning, coming revenue XX% $X.X currency, we with including partners. this was have at conversion history, $XXX currency, revenue we delivered solutions. XX% $XX from ex of strong to XXXX Thank agency margin $X sorry, contribution tax rate of . In annualized margin $XXX flow adjusted now with reaching Megan, with to of good including payment. In contribution grew up savings Retail first for free of from Marketing everyone. million XX% We while was ex-TAC constant expansion. million new brands, in adjusted for was than to as audiences delivered commerce $X.X over cash including and continuing million, payment before constant and our strong more -- and delivered retention an XX% XX% solutions, up this million, million, continue and with over our EBITDA XXXX. Media, growth.

EPS was adjusted in up XXXX. to Our XX% $X.XX

includes by constant contribution to $X XX%, year-over-year compared ex-TAC QX. Turning million was tailwind to our quarter grew foreign fourth ex-TAC performance. $XXX million. $XXX This up contribution from Revenue was QX currency organic to and sequentially At growth currency, a in million. our of X%

up new driven business have down was performance mix in X% our driven contributed QX. XX% XX%. retail impressive solutions, our marketing targeting more Our media, This These with rebalancing than audiences was dynamics lower in line X% XX%, commerce also up of with by by offsetting retargeting growth robust solutions top up representing our growth to year-over-year year-over-year. in

on Media, Retail segments. $XX and constant million last to of at top revenue million, XX% business to was grew currency our growth ex-TAC year. contribution In Turning $XX strong

new remain and contribution campaigns. was strength existing Growth at driven retailer same retention XXX continued saw onboarded with strong, QX partners. with brands our in We and by in from agency clients XXX%. on-site upside growth continued Media Retail Our more traction ex-TAC

becomes global X,XXX we key data expect Media their brands are to Our first-party as as Retail prioritizing continue investments, valuable. trend a increasingly channel a for

this the while this and saw a improvement through continued to up December million, sequential currency, strong. We X% around travel to our strength growth. season returning has $XXX revenue retail We successful peak, X $XXX consecutive a In cyber in making quarter beginning of second the at Marketing and was ex-TAC which of remained traditional quarter, experienced was growth million, holiday year. contribution Solutions, constant in had we carried

delivered performance are acquire customers, benefited full in growth to clients is our latest funnel Commerce strategy embracing up as Audiences We also from We AI-driven optimization. XX% and exceptional that our demonstrating more strategies working. retain audience

Cross-selling driver data leverage spend and have from media clients clients a doubled we solutions. And now shift spend with represents to marketing Commerce for more use that in clients' associated of compared to targeting. remains increasingly we from XX% platforms clients data customer growth retargeting first-party precise XX% alternative than ago. management seen this we Notably, our retention as year solutions tactics. year-over-year This platforms XX% customer retargeting solution data addition Targeting from an Audience important using to our one Criteo more our as are and of revenue

also SSP. We through incremental benefited from demand third-party Grid our Commerce

growth expenses driven not the million in acquisition our other including focus Icon EBITDA to our X% capture Web solutions, QX decreased the of of X% operating revenue rigorous does planned and management This our an Commerce by efficiencies, growth on cost We offsetting this of was XXXX. Audiences. $XXX Non-GAAP quarter. delivered up adjusted our contribution investments.

expense from to bad lower strong benefited also We cash due debt collections.

and million founder Moving million down compensation decreased shares and X% $XX P&L, expense of related acquisition. to part Web's amortization granted decreased treasury as QX XXXX, the XX% in depreciation $X Icon the to share-based including to

QX income our Our was $XX net $XX income million was XXXX. in million and operations from

Our in count weighted share share million. This per average of diluted resulted $X.XX. earnings $XX.X was diluted

Our up We in in $X.XX XX% year-over-year. X.X QX million was EPS XXXX. XXXX adjusted diluted canceled shares

million and We We no cash as to and financial position significant gave of a capital financial solid us with benefit end from which of about allocation the long-term total execute strong December, debt. in had strategy. our liquidity, growth $XXX flexibility generation

to GHG to and sustainability women roles are our terms linked and tech in targets reductions the of loan. facility to sustainability-linked conditions X-year converted Our as plan certain representation revolving Certain commitment strategy, sustainable credit in emissions. now of at increase by the million diversity a facility existing that to credit and demonstrated being to our a recently our equity inclusion core $XXX and

of cash We QX, year-over-year. XX% in $XXX flow million of delivered an increase free

the and [indiscernible] to cash and $XX $XXX Our flow after integration million for costs. $XX of XXXX payment million free million restructuring amounted in

We balanced disciplined have strategy. capital a allocation and

to priorities In via the for included share. for buyback capital in cost year we Our investments to X.X program. shares and per average and to our of or acquisitions our value-enhancing This are free invest million flow capital XXXX, repurchases. $XXX an cash organic return share $XX.XX of repurchased ROI share high XXX% shareholders of deployed million at

under confidence $XXX February, authorized This additional XXXX, enhance program. repurchase strength, to of share to added value. strategy, was existing Board ongoing our financial authorized an Directors program. December the remaining million our $XXX XX, demonstrates be our of business and our commitment repurchase In million shareholder As share there to in our current

Turning which as of our which to our February financial outlook, -- expectations XXXX. our reflects X, reflects today,

third-party outlook Our in cookie second deplication year. Chrome the of assumes on half the

XXXX, to grow to growth with For expect base. million-plus currency grow constant ex-TAC continue at segments. in we contribution from our Retail digit scaled each a of to In mid-single we $XXX expect year-over-year Media, rapidly

further spend our above expect gains. share media growth to We as anticipate market we XX% year-over-year, of activated GroupM's than grow estimated XX% faster

ex-TAC currency, We expect constant translate will consensus approximately with in this expectations. growth into at line contribution XX% of

for Our XX% their XXXX and represents more. retail media than It revenue. guidance includes Overall, half are in their driving demand which of in expected also and a which is the is revenue, approximately Retail that total percentage are ex-TAC services take-rate derived of limited volume-based XX% spend. media our includes more ability our licensing all of to contribution clients, sales effectively do retailers our Media fees of from

to their largest communicated, some a guidance demand our year. the of model progress sales previously we client our reflects XXXX through As as direct moving

and and by than have demand opportunity tap of share growing be momentum the budgets full we are the solid we from campaigns. increase and across we Criteo an more offset the agency client that into as scale retailer our to to We brands, our rest time, funnel of media seeing Over expect across base. national partners this

demand to addition, In more for smaller midsize more expect and retailers. we and drive

on Our on-site strong focused to Retail exciting buying believe formats, strategy and omnichannel forward. continued growth we present the all is drive ad off-site unit Media ecosystem, new going and opportunities

both Commerce low AI-powered traction and Icon Solutions our in Ex-TAC contribution digit and grow to commerce single group Web. reflects for Marketing We This Audiences for SST. expect continued

Chrome it relates that our I'd assumptions of potential impacts targeted. Now to address to loss current we as the signal like in

loss assumes of latter impact second the the $XX consistent signal XXXX. million starts the to an impact cookies Google Our out year. to assumption million half in communicated is phasing the XXXX expected with the in in loss our in that previously of impact guidance estimated with remainder of approximately third-party QX, $XX Chrome resulting loss expected on This half of signal signal

retargeting defecation. contribution As we approximately we assumptions cookie would post move previously as XX% continue throughout our to the year. ex-TAC our expect would on Chrome intend we retain communicated, to We of third-party update of

to model. of allocating and our productivity strategically we optimize disciplined transformation, to XXXX, cost part the enabling organization In our resources areas and As higher intend continue we growth in our are to [indiscernible] efficiencies. while operating right

an to anticipate while investments we EBITDA strategy, continuing Overall, This capabilities, and on AI-driven includes productivity for year-over-year. offset tools. gain margin flat efficiencies of continued rigor inflation to XXXX, XX% in Media adjusted addressability XX% cost approximately Retail multipronged wage our

down We expect million, to we compared slightly items. or year $XXX below rate expect XX%, about be XX% any a before last and flow of nonrecurring free CapEx expect cash adjusted of and to EBITDA conversion normalized of to tax XX% rate we

$XX number to to changes we estimate and QX million margin between constant contribution low a XXXX $X off drive in XX% solid in in $XXX seasonally adjusted million We're million The negative For year-over-year XX% $XX January. of modeling We a year-over-year of outstanding we million, to about to $XXX million on expect $X start purposes, And ex-TAC EBITDA QX. to assume reflecting impact growing currency. ForEx shares a by a quarter. in of improvement flat ex-TAC XXXX. at million,

year. the the reminder, as progress a As more to get year we difficult through comparative prior

near the to a financial Commerce provide segment reporting our accelerated future. the the of platform contributed with contemplating recast XXXX. updating more change This our We integration in launch beginning QX and completion in our of and the acquisition, which to intend regarding products additional follows broadly. of the several reflecting this of Lastly, Web has information we structure Media are change you historical segment Icon information

and positioned to on believe well to in will closing, healthy generation And open for we XXXX we that, performance, profitability, In plans cash for growth, resilient up beyond. strong I value with shareholder deliver our questions. and are drive

Operator

The Instructions] KeyBanc. comes with first Justin Patterson [Operator question from

Justin Patterson

if Great. can. X, I

was to into retention think the give earlier expand the assumptions you into without that like us around at like just the that opportunities I happen Digital loss social Markets do rate Or opportunity XX% It is seen that really in far. you you Megan, made went broaden deprecation can sounds needs today things back retargeting. a What that Sarah, in . something something you more so about EU? deprecation? so set. that just that Is First, I wanted off for to What good could go a loss comment requires And Act you've environment. just that the detail from of really to Facebook traction how signal that do regulation flowing initial is just hoping little you been seeing far of some or have to estimate? And then

Sarah Glickman

At with the assumed. I'll start third-party impact that we've cookie

So effectively, mid-single XXXX. really to you about consistent it's expect And -- -- grow I $X we will let's But all billion is our that in shown XXXX. digits assume, have [indiscernible] you. is already mean, that if we've for say, of with what have very we to we anticipation

in business moves So assume you about And by of around the $XX XXXX. targeting of you million. assume that can up XX% we're kind

million. So $XXX just under

the year, or deprecation there's of cookie late And that will assuming the then frame. X/X the and for or no XX% impact August year start time of September we're in

being less million So $XXX And than only Chrome is impacted. impacted.

our of XX% traffic. about that's So

would assume you shy of So can XX% that's that. of just we million, retain $XXX and

we'd So million. to $XX $XX million lose

remainder. keep would we So the

to as as rationale or hand of our we Todd Megan our to -- over the to we your as said, assumption the continue I second on million $XX part go this question. on to range we can $XX testing And second the the that's update we will see for timing. talk of million. So through part and

Megan Clarken

take. I'll

questions. great Justin,

are to And with the Facebook for which, In with earlier supply opportunities and relationships came are about the these year. have Met we us of remember, terms you with supply Meta, relationship expand these and great access as sort to Instagram. last that of

of there over of building selling utilize their that environments we where and advertisers reach to course, driving beyond social integrate has gain this other also is We're into value internet are environment. those that been time The that as inventory meters Tiktok, tech to access for also So us value instance, capability enables for the audiences. drive big social platforms. platforms the want these to drive but objective, social to into very Open to

third that addressability had The billions pool the access to of us to as strengthens available gaining course, is part that just us, benefit have users they to we of our really the that strategy. of

demand them, and audiences scale push as continue we that will be with is a to then the to those just and long advertising on commerce between aggressive access we're forward. supply as for interactions game So driving have and them are this advertisers that

Operator

comes [ ] question Ronian next Gal from Our Citigroup. with

Unknown Analyst

if expected year. What the think they're your sure the XX% make of do think you as course -- positioned relationship the to we've and needs go so along cookies kind seen the know X% to you from advertisers kind that retaining beyond your through with that me a learnings given happen something and the application of Also month so would you with some I X but of ready sandbox not with close you're it's starting expectations. signal do we're far, and also the cookies, for of just in, just share here? could privacy or early, it's What of

a the away seeing of been else kind retargeting? How it's much is the of of that? audiences then into parse commerce that that And given coming year you're that of in on leader into the share much some what growth. of the kind And strength we've you from bit Or expectations and more. maybe of seen the throughout just is outside year? shift can next How anything from little

Megan Clarken

towards I lot it Great this share of have so Yes. across. printed But to been of a publishers and you you'll the solve same see readiness us towards cookie what trying then and show a movement the on as and now want the sort is to off pass question mix, of star of this kick at that near it's an I'll it sort there think just least and is of I'll for do what sort Todd, the I deprecation comment questions. problem. seen awareness quickly

to relationships on and this publishers of help to get them impact to pass to is with understand our them there job as through we that information the and the directly. sort both Our we them with get also closer

So very we're this. feel to close the approach We good that staying about very have to that. we X-pronged

And multiple what different in in to to broader objective advertisers, mind all the the get on what's depreciation becomes leaning the to is addressability on then that problematic remember, one-to-one of they get along to want the person business to they that flavors to solve they way. is, this a and want agencies and the to if audience, less want bring times, with with also to brand's for reach continuity if also the depending going and problem, to advertiser cookie that's comes but audience, what their them

noted, recent are things it, we we're in as center lot. But know of very and visits the for all So you of it's snack a complex. solving these

it pass me share let of So Todd some across to that.

Todd Parsons

voice. hear nice to your All

for the publishers impact at us period On constant to with the the and getting over CPMs. spend X%, technically. compare expectations advertiser, well that ROAS' for a for to contrast this reinforce we've year I been ready is objective just wanted to testing And

dollars company that deploying and I think the to CPMs. methodology, we're only which is shows cause the effect probably of ad that the publishers

dedicated preparing group collection, protected approach we're new the and technical. shopper involves adapting that interest for pipelines, different to bidding Privacy so Sandbox the readiness the models, for an including strategy that, full and infrastructure, test storage, quite entirely It is audience forth. With of behavior

So what we getting we're period between relationship CPM. ROAS for now ready using all getting ready those testing doing is for will publishers the and a report stable wherein things,

CMA drive providing will will and And in any be API, to improvements realized. the the so which in to consistently feedback that, performance relationship that that Google we to are both

excitement the on today, as it's results and have process soon the noise just about we an -- them given it's and We'll of So report testing report. a accelerated period, all we're schedule. very to as right

Megan Clarken

question I'll other on take the Commerce on Audience. And just had you

thrilled the QX in of contextual and to benefiting a So across other from our cookie-less both covers for -- for multiple or $XX retargeting Audience solutions retargeting of now revenue we're about the at marketing It's QX for the clients. Audience. year. in in and our Commerce clearly But with more AI. growth benefiting is our broadly, and XX% half And switchover Solutions XX% Marketing decline million Audience was from Approximately Solutions Commerce signals. XX% addressability Commerce

we it, of about do clients, all to good we commerce our shift as across to the methods and expect feel new that have include we acquiring broadly. And retaining and for So retargeting look Meta and continue to always audience would with advertising more a from well. on clients, the also

Operator

was next helpful. Research. from . question with Our SPX That very comes RT Kramer Richard

Richard Kramer

you up you played? support in scaling forth. and a a material concerns gross CTV Megan, you lot quick. addressability and this maybe And blog areas, increase of Todd, head to preparedness How think services managed for testing. I a wave were you. marketers obviously, to example, IAB there can try Lab. it of in scarce. expressed hasn't the you going lines post your with get market Privacy your for One more hopefully signal by make Sandbox you where initial them material help out time Tech share lack do without with market count get the edge for so traditionally in Criteo laid of in obviously of of some spend, scale mentioned to is Do media where the each

example, any were take one-offs that -- take effective And Solutions, Marketing of in this there rates Google big Sarah, getting explains the test for in jump? else anything by privacy rate Criteo sandbox, lastly, paid that to

Megan Clarken

great. Richard,

think got these. we've I

limited extend much much, just been across for a as marketplace one grow of to one. Let of towards in me Certainly, the retarget, there mean audiences to it's promises underlying than scale much, our to driving take is there's has terms to that of retargeting. all is have what to the opposed strategy being we the do. first bigger for allocation channels share ability ever that I

our flight tactics, up susceptible and not know, terms well. across third-party as say terms environment take able place an deprecation. not retargeting to channels formats is great cookie a in of funnel, that to not to in funnel and across down It the tactic you also campaigns that's but CTV is Now enabled talk be them is about. and but of important. to It as important clients is to during an has strategy shift [indiscernible] our is

targeting if it environment it who's Media Retail a at the finding in of a minutes, front clearly on Retail becomes Media now slowly yes, high perspective, is it's proposition. of started. programmatic, it go but not And in little until of TV true an But But sitting and it more where is audiences to screen there's allocation screen becoming a an environment, terms opportunity. that that's from ways a which

knowing a is else we what capability with differentiator a have shoppers us, is addressability where what differentiator which For of has. nobody commerce, of are,

strategy this us, doing the is much driving and the funnel is we're what's in time, for course, larger. so middle the to, And over what make at so of

Todd Parsons

I the can resource -- I allocation. about -- about talk about the talk the can the allocation, Richard,

working on I think deprecation is to since signal cookie loss note we've there important what's been XXXX. and

problem. clients look we're what have capture learned the cookie look already protect signal teams I start those working to more have side And the at of that to so in the opportunity for we the on we the other build teams loss. quickly same I and on it problem already and been has and based accelerated learned they depreciation what given expertise. what on, only our market on the that also, place, have there from accomplished that at more because been from we've working we great us

So we're doing place clients, for to creation we group as we and performs work, as look and to this another whether that or it portable it agnostic have privacy . of our already. they're to commerce CTV the sandboxes unique assets goes at sort uses work long channel, being in do other on to interest the it people

Sarah Glickman

SPX precision targeting our address with QX in our -- been no some ability holiday along And at across to there which also which performance strong The a spend. is signals onetimer that. our inventory, continuing retargeting And season, -- has drive to across just campaign is comments, your find a benefit of to engine in CPM. lower

investments solutions I the in would So marketing delivering for our of all really are it's we've across on the say us space. retargeting and made AI

Operator

comes from . Company. question Zgutowicz with Benchmark next Mark Our

Mark Zgutowicz

me. and quick I Sarah Three, and rather you Thank for ones think, Todd.

expectation? that perhaps of I'm how the then a months, would First 'XX, is a contribute impacting sense addressability. XX are take one, have next off-site and number. Just guess, social near on Media you I'm dynamics to to the curious growth, just on term of what in ongoing rate just be and around sort user dynamics, rate, in if more sense yet growth trying may get think you of specifically your the that what indirectly, was -- of take this media perhaps second curious curious, . buy the conservatism the what helpful. looking of the of from equation. there sort the And lastly, I XX% for offsite sort as the I question, were just assumptions the of that Retail side at just And Sarah, course, retail about your maybe

Megan Clarken

there access, be I question of and to. I'll guess, to billions to social the relationship with its [indiscernible]. What able the just Mark, Yes, start match environment about to is we have ID

you able have address where that for for publishers match to, or is rates of a issues ID to make deprecation an environments themselves So an the pass ID the about that have ready if match. get just as to actual [indiscernible] flowed a today environments that Internet, be whether open can think they be they or one email to

place, right to the and you're indecently just at right that right right time at the the So the device. person getting

we is like they that environment what -- they And have environment. are about long-term social

more You you. you measurement up don't brand, can follow solid you is precise only make spending that can with advertiser know the the a for but match, with really

massive to it set the has us include us, come an with of For of [indiscernible]. benefit that in billions IDs added just addressability X our relationship that scale that another capability gives

in to signals point taking particular, get where gap that a on our away we other ability by signal, just fill Chrome continuity just cookie we're third-party and as looking to in that adds ability at, that to access this brings and possible, to that's that So to had it clients using what the again, billions [indiscernible]. makes to our us. provide we what signals that's

Sarah Glickman

our renew right. mutated which the not we going and on on include XX% join we're basis. can QX, multiyear of in And largest as a the comment reasons, customers. to did client competitive I Yes, a contract, that change we're expectation we rate individual does assuming for retail to growth

expectation I we're gross However, within is is that. share will XX%, what and would media around say our spend taking grow

XX% expectation our So XX% is a from versus of market. kind the expectation

assume that our quite grow clients and to all of considerably. That does are continuing expand

not So expectation. I say is conservative it a would

and to beyond. a that take growth onwards. QX of and across is then And our expectation around that about X rate, community average the this key will is in terms will quarter-on-quarter, the expectation would around kind then of XX.X%, of XXXX Those is And just mid-teens terms the our year, previously board. We XXXX in decline in in impact in communicated expecting parts. the changes be are strong in contracts

Operator

Our next with Mark Stifel. Kelley question from comes

Mark Kelley

the Just to to from go back retail the last response. media commentary

contract retailer my the That's I first on Retail QX, the the I grows think sounds year change think in and that 'XX what Retail year spend guess media do we you run basis, with the Media, heard kicks for kicks how your that's about So Media? are contract the Retail of do for QX. if given in guess accounts unchanged bit I how for we think like I the to kind the largest exit for a activated XXXX. XX% in, easier, reported guess Media, for of rate correctly. a start you it's little question. trajectory the about

one, of And hearing cookie talk publishers are newer just these adopting some about second then you, the work how around. Megan,

ad DSP testing the terms that that the subscale of especially I behind Is any think in consolidation more across kind not certainly are privacy way And Retail there's and other community particularly does definitely like for sentiment you just side. you guess, guess, meaningful back Media, tech maybe stand of opportunity workaround. share advertising cookie smaller ex-TAC, the broadly? take to I tools and of the guys, an the the or a I in folks, and on facilitate [indiscernible],

Megan Clarken

just sorry, on Yes, QX. quickly

will give So is that yes, But recon for the coming new that QX on the seeing be, anticipate coming kicks contract year, before are kind in, and of QX. growth, which part, we we don't the QX. stronger guidance and into we would through most

Sarah Glickman

question. a It great is great a question. it's Mark,

in the that was in well, And think sitting U.S. but you from to Australia to mean many. as we're you or I again. ready the at being they're of it on as working I talked said of before, firstly, you're other understanding, And of -- being move we've if what's ready. I And just been stages naturally that and as on, out different I I've I in kind feels -- week. publishers. they from sort out in globe, must the the the going say Europe, closer know center move

the understand where of what to trying do to them have new problem trying the see and and global on [indiscernible]. they doing a it their is partners rest to what will that publishers this be to means So to best

terms with long need to they marketplace. being we are and to as I again, for time advantage in and we we've be But an ready your [indiscernible], this ready absolutely suspect ready. absolute in is what ready. know, smaller been competitors are knowing of the you that content CSPs a where And

through services by over big the sure they who a remain business we come make need that of those are to there sure for to that is the us, So yes, in I with deprecation, make except not. course, an as move that being have there and it tech advantage sort the the cookie their opportunity is that are And continuing but partners not served ad clients of we there's many successful. space, and a will offer and other we

put really getting time that opportunity advantage for is, for been of that taking major -- at results it for into that the of what that call for looking a some work is the in we've So taking ready this. in getting it us years terms we've and

Operator

from comes Doug JPMorgan. question with Next Anmuth

Katy Ansel

your This First, to world, is on you that Doug. think is just approach more bit just over think how for like going we should to in look about end, you about the talk I cookie to and XXXX. the little landscape just X-pronged time? deprecation can loss a the post in advertising like have Katy And signal sizing

bit little Marketing quick uplift Can drove Secondly, the quarter that just Solutions. about in a the that one. more a called out AI just talk you the . you enhancements in

Megan Clarken

I'm going to pass to [indiscernible] Todd.

Todd Parsons

Yes. I first in. can jump to want If -- one. I'll do the

Megan laid strategy, do an which offline the to multipronged core. our from potentially the first-party on identifiers identifier it out [indiscernible]. core So The as we to well or data third-party very intermediary, using at matched standpoint offline notifier

Sandbox closed focused both multipronged second the third I The that log we've help at and here data be to really thing that Privacy Sandbox on social we piece being that to in is Privacy our commerce the audiences is doing interest And to work that's platforms. divide could have of outside that deploying been data. addition retailers groups model their by interest the publishers we're and own reinforce strategy propagated innovated group with using just environments. want of so

it AI maybe other. strategy such deeply multiphonapproach want emphasize, pace need of The If of the big going of run time select retailers on and a as better monitor I new multi-prong make seeing of to this and have identity up choose epic strategy we the working versus open be done publishers problem through chosen opportunities take AI to or space. possible [ simpler getting using our excited to it through that and in sandboxes the using then performance. audiences we're has way into it's and too one What pillars through our So better building ] program our mining X the things through partners don't together to hoping better solutions mysterious for brands our at complicated with for strategy to or be for much these these that that brands. made automatically risk

and core it. to AI it. So the continuing on very we're the things and own at choose excited run at very and we're time of solution what to automatically right really develop make just about is promising, Identity to the It's doing and using decision strategy,

Sarah Glickman

And and their that AI. that in ways do I is our has on the appealing and how AI year optimizing for be the our focus QX. on to to consumers are really And the was we we and how just clients engine It campaigns and use works. generative impacted continued build it for XXXX formats continuing

area the will We're XXXX for as So and about it us how us excited future Drive only paying of [indiscernible]. off incredibly in to it's investment an that with into still was well. very an XX, but high not

Megan Clarken

[indiscernible].

Operator

Thank conference today's attending now presentation. concluded. The you has for

disconnect. may now You

Criteo (CRTO) 7 Feb 242023 Q4 Earnings call transcript