CRTO - Earnings call transcript Q2 2024

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Operator

Good morning, and welcome to Criteo's Second Quarter 2024 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 Second Quarter 2024 Earnings Call.

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

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

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

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

please to XX-Q most information, recent more with factors For our release, and XX-K refer filed discussed earnings in our Forms, as the risk well as SEC. the

and included the metrics will comparable GAAP our directly in reconciliations to today. We non-GAAP performance. discuss also are most release measures earnings published of Definitions our

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

Megan Clarken

Thank adjusted Notably, These Melanie, of double-digit the for third line consecutive Criteo. who are for results I'm teams our second our margin a achieved organic we record for good been Thanks, with and across and top quarter. it's performance to quarter and you business. morning, share reflect the strong growth work EBITDA QX. we outstanding momentum earnings for driving call delivered quarter that excited for what our us joining another everyone.

and access from for end a to support opted to third-party we third-party move Chrome. Sandbox continue deprecate out quarter's cookies on performance, support new with to from third-party will Google this into signals to that proposing users. choice. This plan Google's continue opted means for are announcement to delving that Privacy to expect benefit like fully to ongoing user users, now framework They away Before address recent their original I'd to cookies

look signal anticipated. impact a that lead than to result, smaller would We any shape forward continued this Google collaboration expect scenario with to framework. a loss to As we our previously given new

the we news, line stability, precise clarity pinpoint Although entire change, and it's and this of good to the benefiting this landscape. impact premature advertising ultimately time which provides publisher more welcome

addressability next-generation unified ability the of coming run that provide and signals. time scalability ecosystem We news in third-party more additional addressability with confident with unchanged strength remain efficient strategy a to safe for privacy options. interoperability Our open, more remains our supports multiple and solutions of

we company Our as media continue powerhouse. vision a coming our into is quickly to commerce life transform to

discovery data for and marketers platform throughout making our build We journey continue AI effect value from our when demand ecosystem. Partnerships consumers purchase, a supply and media creating are commerce all focus and unified buyer a vital reaching flywheel side to to unique leveraging us the media scaling relationships, and owners. for our on their capabilities commerce that assets, best-in-class our perfect

long-standing Over we're Microsoft Media we audiences bring extend commerce through to to the our the excited and we've properties, now Microsoft advertising years, past few suite. native on to Microsoft worked deliver partnership Retail closely our high-quality with with

can the and clients. The for partners more that is with retail world the Criteo of converging is collaboration recent most Our belief twofold. Microsoft and potential and play in announcement role together, Microsoft full its reinforces media unlocking central a

budgets enable first advertisers, into Microsoft network opportunity capitalizing on bring This inventories First, and we're look client this forward the new retailers. to a XXX tap value reach together design and the planning budgets process. Integration, excited expanding of shift from of retailers to underway, advertising's to more Media. to as in Retail XXX,XXX-plus are to and we their Microsoft demand our will global of extensive integration

Criteo retailers and their retail platform. media platform to transition the supply to onto of is as Second, preferred these the expected shows in on-site The XXXX. working our Microsoft's consolidate Criteo we're partner, Microsoft to start advertising from

We even tech expect for creating unified player ad retail in all position access the media an to while further this more strengthen as media leading our buyers.

we Our advertiser shared force the focus journey, on outcomes AI retailer Together, product expanded privacy-enhancing aim partnership. strengths targeting, creative campaign behind tapping workflows across predictive and recommendation, monetization to elevate to a is innovation consumer and unifying into formats. our world-class drive and modeling

in are to with exciting quarter this we the and AI gain Retail XX% year-over-year the growth with Retail excited incredibly the and working Microsoft, market Media We top on activated with share that this market. continue spend, with of opportunities work development Microsoft in unlocked. On Media media outpacing second

a and with performance home leader luxury media electronics, distribution Selfridges, store advertising website. to retailer their the EMEA. And with global XX Amazon. and with we retail and complement new e-commerce and online of few now the We expanded our is the a General, retailers, the to leading top wins to retailer XX% luxury we've believe of both large e-commerce proud all a Euronics, with and using QVC department notable We're capabilities. Dollar on footprint, excited including top We Americas retail our become media partnering we the Belk. In retailers in media to also appliances over XX% regions past partner global had in market across Europe, that power the we're of in U.S. months technology of in marketing relationship the retail MyTheresa, have XX work We're including hub

retailers broadening retailers scale our product global end-to-end to we're and to us media in Peru our ability simple-to-use and These Brazil. APAC for capabilities, in new sales including products, performance retail quickly, presence, and our are expertise. Lastly, and coming AI-driven presence world-leading LATAM,

tech-enabled verticals adjacent into services. carries momentum as such Our

instance, everyday since strong and Uber Southeast XX We've users. across deliveries various beverages spirits services earlier financial providing million category services leading digital For this demand year. Asia, also partnership in to regions to and mobility, the as growth revenue our seen over we app for added expanded the such and we Grab, Eats

continue strong Importantly, to experience we retention expansion. and client

see native major EMEA reach QX, brands business. We're to platform, to accelerated our stickiness contributes expansion the partnership than that half the of as a them to DSP, grow Media in and technical spend This with entry and we're scale. We activity of ads. give in over new recent video XX% or deep demand-side companies retailers integration XXX agencies saw in their our point pleased retail U.S., more of year-over-year. holding of offering. single media about the Media agency drives leveraging retailers. lean In our DocMorris launch formats and at to and valuable see ad often advertising the out our the the added for Americas Retail multiyear Our example encouraged network, with sequentially, Commerce we our very we network multiple exclusive is contracts are their also A building with

for As a now spend result, account agencies of in the Commerce U.S. Max X/X

on our with focus media closed-loop networks Europe, supply individually, networks consolidated brands to more turn, Max Max with tool. products it's of campaigns, larger further of and assets demand products. their campaigns to data are we're within world's capability really without to the SKU-based retail of and biggest to on and currently run retailer their retailers enables Club, Joy agencies a further across promote management any simple marketers meaning matters, DSP open inventory. we on addition also leverage launched measurement. retailers for streamlined Internet we products outside our This executing majority quarter, bring board. XXX our and and X where our extend that expected multiple to agencies a brands [indiscernible] retailers, brands in retail optimization DSP across sold. All selling to can our reach reach number network planning campaigns ads brings allows Commerce using one recent on new campaign workflow. product to what French the bringing of Amazon. Commerce activation is media divide In This enabling on sponsored off-site workflow Instead off-site This U.S. retail X demand their in of

which targeting audiences audiences Media, including capabilities, our XX%. for seeing our up commerce Performance We're services. to Turning strong ad retargeting, supply encompasses and momentum tech continued commerce and

shopping performance commerce a we're audiences using enhancements the our SSP. Today, grid adoption excluding first-party across of quarters, to shopping revenue the Media sales clients commerce services of drive addition data data-driven demand open valuable customer efforts, continuously are Performance set and to entire to successful the our from solutions, potential This of accelerated supply through Internet largest third-party benefited journey reach goal and in to AI-driven was XX% and audiences appeal pool clients. and commerce cross-selling signals larger comes incremental prior to our on value. Similar retargeting. We leveraging ad tech from always to the innovating lifetime of and we grow intent more

pleased in Meta's combination to the large-scale the Facebook Our retargeting second quarter and with reach in Internet inventory. continued with open campaigns, has We're activation growth performance. and to across a growing success for in Instagram inventory of our returned see row, including solution

Criteo partnered vindicating one For example, social of with and candidate effectively to marketplace channel. reed.co.uk, leading assess the for social the U.K.'s open intent, word link environment careers

Meta of our with or part enabled budgets our and platform, Display the while capture Grid, generate ago, per through campaigns Commerce supply SSP at to DSPs with of Media to for for additional and Video another scale. third-party thousands to audience Grid publisher brands progress the Commerce Media approximately XXX. It by its us Commerce agencies commerce year leverage Google's with targeted represents them highly date. packages our access X%. We launched power to like application reducing and integration incremental applications cost we're side Our Commerce a pleased inventory and

roster to names like Times. York of continue publishers added the recently grow most New our top We premium and

to The in with with for unique advertising. our future commerce shopping of our like formats AI intent clients. performance app put the best-in-class we're commerce high new large strength of base our which high first introduced also seeing position advertising pioneer is environments grid, launch of its assets, performance to data with payment the us We and Plana, a combined demand already

the and value the models commerce deep comprehensive the journey sites, As platforms conclude, clients' social would where Criteo's and consumer a strategy be leverage performance intersection capabilities work is buying trusted Media world-leading through advanced paradigm open platform throughout our expectations. and to groups, Media new the add control. To be that with Commerce a ensure media Internet. This said sides across addressability of data personalized business of consumer progress while of we with a performance we Commerce We reminder, the retailer media our set to relevant, learning our and targeting transformation and meeting foundation proprietary at us data objective advertising sets our right interest we're platform. as privacy both of our setting

committed our business growth and propel strategy conviction continue remain Retail we Media. promotion ready please update and XXXX delivering XX. We're for valuable, to the exciting well on We of Performance opportunities Retail in announced to recently and that our momentum and live to see and webcast Media we're date building beyond. We a be strong further upcoming the Media growth the have shareholder drive to profitable investor value. And ahead, November leaders save towards positioned key in will

get the Sarah? opportunities our and from an on will leadership who our financial Retail chance Sarah, ahead. With over that, provide the update will our on You results call business more and to to provide the hand will team, details outlook. Media hear who I'll our

Sarah Glickman

board. good $XXX foreign currency, QX performance We ex-TAC headwinds contribution operating million, and XX% and morning, management. Revenue At enabled million. from increased the was results disciplined with Megan, ex-TAC strong leverage QX you, Thank grew and with of growth strong year-over-year $XXX across by constant by record delivered million $X cost including top-line currencies everyone. contribution

We continue Drive solutions business retention to mix in and close high remains representing top QX. at new with rebalance of XX%. shift XX% our our line to our

$XX grew QX. ex-TAC and with Media in Retail growth segments, to million, our double-digit Media. Media $XX and XX% in X was Retail Revenue line Starting at with expectations. currency constant contribution Our Performance delivered million,

model. As transition their the retailer of results our largest to previously sales QX client included communicated, our expected direct

strong, the XXX%, Our was and of in ex-TAC benefited ramp-up signed driven and client newly the primarily we by U.S., same retention our from the from existing base QX clients at U.K. Growth with Germany growth retailers. remain contribution retailer

retention fund in scale have Media. to and unmatched Retail continue strong We experience

to starting XXXX further in Microsoft monetization retailers are our stack, scale transition our technology We advertising excited also to on-site footprint. to

this On with partnered quarter. brands the new demand X,XXX side, about we brands and global have now onboarded XXX

from mainly Our bookings, agency strong We grew spend year-over-year QX brand market robust share. beauty. growth demonstrating and activated we categories continue like CPG gain XX% above in to saw in media our partners that

Media agencies investments to as move for We are pleased directly the paying Retail to see prioritize closed advertising impact brands sale. a and an marketing

of Media, performance We budgets was us XX% demand and revenue are about currency. also advertisers. In was advertising, at audience X%. new year XX% impressive contribution shoppers. in AI-powered saw upcoming integration and expect commerce large-scale data on grew We technology Microsoft supply from year-on-year million, up targeting we excited constant growth in which and of continued top find last growth our in-market the leverage $XXX X% with Performance ex-TAC up to thousands will modeling access commerce and to quarter we was AdTech as Retargeting same $XXX XX% services up audience give million,

and leverages innovating our clients. to offer Criteo lab leading for performance cutting-edge AI Our keeps platform AI our

saw optimization Our budgets latest double-digit U.S. marketplaces and and Korea. demand drove with classified EBITDA of in remains QX in again we in retail. In Europe. [indiscernible] which double-digit XX% South followed vertical, quarter and unlock is fashion. $XX year-over-year. AI-driven in like adjusted while for We retail, performance contribution million XXXX, Travel growth solid up delivered We grew XX% million and uplift delivered a from our up ex-TAC our lower the QX, range largest spend stores valued vertical, department additional year-over-year the clients in fastest-growing this by

Our operating double-digit leverage. top a line in cost lower growth run strong rate and resulted

from in continued on for bad our to milestone decreased some second the into also of as related as expense due and DSOs benefited allocation. investments reduction large that rigor half the moved a partnerships. Non-GAAP year debt timing investors well to expenses a reflecting payment resource operating of We one -- the X% year-over-year, lower Retail Media of

scalability operating in efficiency. We and investing our areas model by driving for optimizing are transformation growth our and

the operational effectiveness streamlined processes deployment We of AI-powered productivity tools. with and enhancing our are also

down the as of million million acquisition. founder expense expected, the Depreciation Share-based decreased icomweb Moving XX% in XXXX. compensation to related to $X includes as amortization and $XX granted was QX to part $XX P&L. which million shares

grew income XXXX. Our in increased net $XX million to from million operations $XX our to and income QX

QX of share per up count resulted and average million, share, diluted $X.XX adjusted was in earnings XXXX weighted in share diluted XXX% diluted EPS year-over-year. XX our Our which was per $X.XX

benefit financial $XXX and about million long-term growth financial end cash to gives position of June, the our total sheet balance continue at with disciplined us solid flexibility debt. and We strategy from allocation. robust significant had to no a execute generation balanced which and and in strong We liquidity capital

cash operating lower million $X was and cash negative by reflecting expected, offset by in CapEx. As million partially was $XX free QX flow flow seasonality,

was $XXX Our free trailing flow XX-month cash million.

driving are and in value. we business confident financial our and are We strategy strength, fully to committed shareholder

return is priority and buyback share media commerce continue our to to growth to platform to sustainable shareholders our key organic invest value-enhancing in program. enable Our alongside acquisitions capital to continue via to

in share. of We have million of a to per This track million $XXX million repurchase capital significant XXXX, deployed repurchased stock and including long-standing to shares in X.X cost an our shareholders at $XX.XX on record of QX. average included $XX are returning we

We of our also remaining had canceled end shares in X in QX. At $XXX million million early Board buyback the authorization. June, share we

Turning to financial outlook. our

as of of year on for uncertainties, the entered have a expectations confidence continued the strength double-digit second our we with deliver raised half today, to growth in XXXX. based Despite macro expansion. the August position margin of guidance year our and We X,

in XX% expect of to is acceleration XXXX. For ex-TAC XXXX, at in an our single-digit This now guidance high we compared growth increase with XX% to from X% segments. contribution constant meaningful and our organic growth currency growth of to prior year-over-year a is both grow

the sales XX% of As to increase model the year. approximately tougher in we previously a of contribution year as currency initial in an our a reminder, This impact demand of progress become our In performance, XX% client XXXX. to ability comps given our largest our are to and to ex-TAC XX% deliver year-to-date as the direct transitioning communicated. from we prior Media, growth confident through at constant includes is guidance Retail

strong quarter. reminder, comps year, first given a material QX a the XXXX. performance we our to with the our Advertising growth Media, largest have As We for strategic we QX QX expect with raised Performance collaboration do have in in impact and tougher Microsoft guidance XXXX. In being half not single-digit for our of high to a

reflects from XX% and XXXX. growth. operating areas transformation confidence growth, as management have for also in our top in raised line strong This the margin XX% to leverage model operating expense from we continue to of EBITDA adjusted our We invest our of

tax of we expect XXXX, to For a rate XX% normalized XX%.

slightly CapEx $XXX is AI invest be Our leading expected to our million to below overall we as continue and infrastructure. optimize

any Lastly, we expect flow nonrecurring a of cash items. free adjusted EBITDA XX% before of rate conversion approximately

million continue to million, superior in X% portfolio. of million impact performance ForEx contribution drive estimate our product contribution $X as about For ex-TAC growing year-over-year currency $X for by on ex-TAC to expect $XXX of to QX drive We we changes at advertisers we XX% negative to to $XXX QX. constant across a XXXX, million

mentioned, We expect includes third $XX second investments $XX adjusted to the timing as quarter. EBITDA previously shift the the certain million million, and between of this to from quarter

ahead, brings one Looking announcement addressability to of Google's the pillars of next-generation strategy. favorable our clarity

we expect including third-party While our Privacy this continue to we strategy, news to retain more signals, API. recent advance and addressability is Sandbox

a of a model. resilient have financial strong and impact than would strategy As closing, communicated. In loss the we in previously conviction signal potential Chrome business our in result, smaller have

begin committed open to with continued to for We hand that, The well it we I'll is positioned wide Criteo. And for maximizing shareholder the and are success, future Q&A the are value. operator session. to over

Operator

Instructions] Citi. Your with first comes [Operator Arounian question from Ygal

Ygal Arounian

will And the different, bit good look maybe have this user for and wasn't your revenue. with talk might on opt-in start that certainly opt-in like. choice guess for with an little cookies. signal you're the the a evolves while to will what But how just you signal maybe impact going I expectations could understand IDSA through a that's also color, be to good less, giving announcement with Google helpful of less

you you And then do about Privacy opting ecosystem? a kind this do And the have and on the how how of Sandbox I opting and evolving? in and that for you So what balance think in out means follow-up. see

Megan Clarken

something it. But [indiscernible]. We But for for if what cookies, just that the of -- B. clarity good a of for thing detail imagine and of to us, sort across for because good are is Good clearly single-lane come to of highway only and go going this, going to from from good one is a like. we is reiterate and It's question still this hear we're to about They're team very In will there saying working to you, going more the first that the in very this terms line what you by years. let to time a around to how you in first cookies Google what thanks just to model. which design. through as that which now sees model, the of road with and collaborating is in one. for and anxiously than better very same many, Google a do as start up. are to await how to the color nothing. are in A some pass not us bit to really you does from he with closely getting they case, and effective a we going I'm do looks he's of of have Optum to Todd them The we're me It's I more news what part the a can now because for the working them many terms sort them industry to they're they're see going closer still do,

we as effectively that can work will consumers the we stay set up lane in as single be can sure make that to we're So by way many as sure close that be want as big We that, that that's pass to in making But can possible. that and they Google so to I to come. it doing opting it possibly capture Todd. thrilled.

Todd Parsons

consumer with ATT think user say design opting to trade-off in a it you straight as team, to The that out emphasize bit, Great. to take in going balanced close and we important mentioned, choice that I a approach team, as the the on that to objective have to build is opting I because the can from that that of clarity the top comparison that or Ygal. we're fair -- Google little for messaging. well

different that be more language the So time do will they're is should this what be and I addressed the consumers that around favorable. way that educated think are with

is excited performance Secondly, about Megan's signals has fact years in last what using to point the cookies we that the that than some And machine better you you cookies whatever song. compare consider that can years, our approaches approach, none, on that have the the new additional for imagine built past. a about fact only a to in are we're and with like worked left if built X have into contrast

Criteo the So is cookies are partners. think we're how regardless amazing additional remaining excited and our small, of an to we this and for have that progression

Ygal Arounian

little Great. focus right. question, side All it's Microsoft to this We'll the in Media not wanted evolves, but that's see I have on material a how to second My Understanding helpful. partnership on going impact XXXX. a really Retail bit. all the

If landscape. key for what This competitor help us XXXX on with. but about We this Media we maybe partners. they're the know think Microsoft, bigger what it the within that was you've you're in also beyond you the positioning products, of might AdTech more side. similarly, be Criteo's their up larger and Commerce Media the of but Retail invest size agencies. agencies what importantly, Max had with retail hear maybe impact media of I means and in Retail kind means? And and And then with customers partnering becoming relationship to continuing could

evolves maybe from positioning landscape evolved and through walk Just here? it your us and the has how how

Megan Clarken

that -- things it it I there bring -- to to -- And Thanks start. you is it like way. has how takes would to consolidation that to that This clients to continues life. This question. identifying the ecosystem. supply don't medium that's few we their for a in And we the player the who take And out fastest-growing today. that look granted. consolidate And that the digital Retail and they've have Media work numbers, that good has a and put platform. pass world-leading is to takes given trust take again. speaks Criteo us not their need this Microsoft if don't that is to the the and medium with we be trust is at is Yes. clients shifts lightly, towards another to Good across -- years

nurture to to that which create of as in have single We have clients access to general very nod a of a a Criteo those those retailers of media the with platform a to onto sitting bringing network million happens that. well. By in offering of very large and retail advertisers advertisers X.X compelling forward is Microsoft center for big

So flow see shift media, from a demand gets how I ago, advertising this or we that starts how it's in words. you'll using to closer this a to supply get platform. I as as weeks retailers there's how system. to the we've announced implementation, but hard clients out, see it put Criteo with the more retail that few from get rolled -- in Microsoft's through which Microsoft us side hear comfortable actual And

retailers [indiscernible] this but a against to and not retail the to for This speak This it. compelling ecosystem of to a environment. about alternative life lot or is retailers, a advertisers. other coming a of very And an not in -- is we having across is very, good. Amazon way which offering All an creating supplement -- is

the we from give move, you financial this perspective very XXXX. more color a So product and to get can this the clients about for on we implementation closer means of as sort of excited the we're set and what

Operator

Your Stifel. next with Mark question Kelley from comes

Mark Kelley

quick. question. Todd, consumer in be when language we'll wrong, to back a or maybe I clarifying the the more think relative see said favorable opt people go that heard out favorable maybe or more really cookie the stuff I I ecosystem more heard. of cookies ATT, I want as in Criteo to to favorable the first, deprecation you to to expect you Maybe more to

the all start please, want can of you that So by with after part that. then -- can And if I correct other that me. means, to that start as one. ask with one we

Todd Parsons

Yes.

opt reflection think that say would ATT we mean sort was to prompt is consumers I there I advertising. they're remaining had same mean implementation going is would the value that vilified could So my take the to on will And one favorable third-party the out. from will more that Google that both. cookies to in rolled assurance of be and the we've more of not after that assume consumers the which to approach,

Criteo So that. are by friendly advertisers all publishers and ergo that friendly to helped to

Mark Kelley

want other Okay. on then Media. let's the to All one, Perfect. right. And focus -- I Retail

You already have a big footprint.

or You're this adding bringing at markets your media Or obvious on incremental in I you the any view? look where geographies? back guess, retail the step there Microsoft and supply. of end a take I When guess supply, opportunity are is next component

Megan Clarken

this easy more winning an with into -- we went We've strategy one. but year a Good always retailers. of question,

we of out stack retailers we us I the it footprint. is out also flywheel. actual remember or continue saying into to fact building We're as that flywheel this called build on. more the probably is that -- And that a testament sort earlier came the to on a a You'll XXXX. bring It to

and it's if and demand and -- attracts that demand coming capability out So you supply looking the things X we're of having more demand both footprint, and the the by through offering demand retail out sort -- their to back because demand, is doing and retailers it's -- some other advertising format. that scale, lot also to opportunity the our building or into. And those and can scale our new the as who I prove about assets the and building us their getting got then to top clients to continue continue sort at of center need is can sandwiching talked you're something at getting bottom feed supply the they of have that of together, and leaning to are to with scale media for and you're looks getting statements a on bring clients things geo supply supply enjoy

of a supply is creation just drives and thing just All this more that more demand. of flywheel a

all to on pockets, And us, trying making that are moving, is in are for we're side, is that focusing seeing. of -- comes us, the that capabilities to these which side, works. are sure supply nascent. They exactly sorts still also are on contributing faster no to coming built wheel this is coming get announcements, scale doing the growing, faster. So flywheel supply this wheel clients we're to momentum, with built right more retailers up They but that, offered Criteo. now, this we're there's and the our who And still we that they still that work out see and move at that's us, huge to as it that stuff at being we're we're and building, doubt at the trying how it and some because demand here momentum being grow, supply more helping what we're

Operator

comes question Markets. next Your Capital with from Brian Pitz BMO

Brian Pitz

follow-on few Maybe first a from questions. quick the

some expect respect love when take this business, strategy long-term ever of Street well continue? different a world drivers below like retailers, think -- just changes hard at more you're on of look of very still just to you as in place? sense give some as for the It then kind what you in just product. and away that to to Obviously, But here? If to putting the identity And about strategically the the does thinking? was it's solutions back available. us well thinking as this X some the how your retargeting you TAC, X% coming were step do you having they And change seems for with of expecting. new retargeting? executed Or legacy What step you providers business. How I the in from momentum are the talk below and

Megan Clarken

Okay. Good. Brian. Thank you. Thanks,

Let just me both to of or and testament some But are I'm now they take and retargeting. Todd he's the how instance. And roadmap entire performance those how perspective commerce audiences driving to with fact first down that going of performance environment us of funnel part top, portfolio it, before the and coming entire has work to entire sticky the is one well beginning up of targeting more is the a across together how for product our sort that the and the retargeting tactics the from become. clients hand using detail for across for retargeting then for

both of I of the money between serve clients capability I the them tactics. And at the or objective too objective times that and tactic because and different want that about is way slightly retargeting now reasons. for moving but different. both able different purposes. their think -- the tactic clients to Their work they our now different XX% go And it's be are to audience they slightly do commerce is same, getting say

renewed that seeing So we a now which do for have And reinvented and retargeting as focus you're products the been excitement now offering given supplementary. that numbers. we us, than more retargeting we're and now complementary it's has that causing that retargeting, appearing internally on are and excitement is in externally

because very, Todd to pass very lead, product I'll So across closely. lead -- the it area into he's this leaning product from

Todd Parsons

build Megan would on said. I Well, just what

within And If the the about of those tactics. much you to just we for It's they activities control. Retargeting of performance. to is preserve is we think the supporting if can. that possibly now performance-minded performance-minded run something us do But about it's traditional focused of from. think buyer, which, one on for all performance buyer, away us course, everything their budgets as you nothing we're as

that perspective RTV in product the from we're performance continue And those So of partners. approached can to that, from course, that is Criteo. The do addressability performance new reach our to always way a social budgets still from roadmap strategy and our spend that the to open gotten have environment expectations multipronged expanding they've we through get Mark. open maintain the we'll able and for where auction, get

So that possible for servicing our is for X to as we're as point different provide our is stop we're it that maintaining landing not as goal. out as retargeting tactics And much days. addition performance. customers going while emphasizing these their retargeting a important that in But said, to Megan to to reach

we've retargeting performance talked so the our talked really help commerce about what deemphasize So we've acquisition those tactic the growth a in is, retention, for it single and things before, mix. Brian, fast being audiences, about customer of together and

Megan Clarken

Brian, I we your question. second your hear apologize And of part couldn't

Brian Pitz

Sure.

Sorry.

Just about TAC.

how TAC? drivers then sustainable there? in And TAC. just some your on us are outperformed of improvements obviously give the You those you Can

Todd Parsons

-- bit about speaking generally a speaking, mean, we've as I that and think talked before. answer I'll quite Generally well. Yes. I this

supply with are doing we're direct more with doing path company's the partners. And We supply, been with supply which optimization part of time. has a our lineage for more indirect long

X traffic. to is our through we're of seeing combination produce ability you're course, to And things. upside what those a So excited in of coming acquire there

Operator

Your with next Doug Anmuth from question comes JPMorgan.

Katy Ansel

on Katy, for Doug. is This

on have and in a undertaking. know XXXX. mean, I the this just the follow-up I Microsoft feels like pretty more integration big so a begins partnership. First, I exciting

some uplift a talk needed? Second, been like year required you almost you've and much just I about like I more wins. can Commerce incremental and up more is much it's running? in on do a launch, this its feel pretty good you how like not Or mean, Max. investment since it get investment you're had to is mean, an So place, sounds good client

just you can an how progressing been a this initial to back, step expectations? relative your So on has provide update taking

Megan Clarken

Yes. Katy, questions. good thanks you, hear and for the to from

not fantastic I Microsoft, for us it's news very investment to with teeth exciting the our for to and in start have project lot get yes, a firstly, into. There's us here. a of -- On

Criteo's the to if So that demand available can imagine advertisers. you Microsoft networks would retail from side, its make

there. will to get it DSP use its So own

to advertising's to to we this them work same. base across have by supply might base and Criteo sort we not -- platform. Again, any where so we get understand, Microsoft through don't one for to one that opening migrate then granted with have to from not take platform be moving one is in by side, And gap we there. fill the the are can client the the Microsoft's up all there's on have caused that So that this one because other to access they work client of work

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sides buying side of terms the quarter. terrific so pathway And for you agencies to that Media consecutive that MAX all get they're MAX side access the second Retail our house, it if MAX in through grew for buying $XXX that is gateway, of the MAX. this million to through demand networks, On like, MAX, been the the X is -- remember. has One having to

this that to have is increasing that retail multiyear with get partnerships who the So media they come inventory. to agencies we are -- spend as MAX just access through retail

doing with happy are job with front. on extremely us Agencies we're a that working that. So terrific

of to access pipeline audiences with be of side terms the we as Joy the is off-site for MAX, and we Club MAX to coming France. a working in It's those the, third-party for their which what today that U.S. with come DSPs Internet with advertising said campaigns. Internet. And it other innings some At advertising different very off-site, retailers. about use across off-site offsite the call we've vehicle And the off-site open talked On in solid or early using of innings across help moment, here to the we're through able their retailers a big as early have to get campaigns I to everywhere, we of retailer wins, extend well. is open an brands those them out seen

going buying So be or there's inventory off-site buying MAX, Retail activity through of lot it Media on inventory. a whether

we're where like time. -- it exactly at it to this is be we'd point so And in

Operator

next Zgutowicz comes question Benchmark Mark from Company. Your with

Mark Zgutowicz

quick a Todd, maybe on cookies. just follow-up

you disruptions Google and in process? And when then a the And just expect Megan, on majority digging Cmax. little how consent or user it? deeper X/X you as business would anticipate spend. to agencies, of in curious mentioned the Just call you comprised implement you maybe choice of any temporary

if think the preventing curious, or from agencies. what's volume more Just about the you coming roadblocks from

how curious lot terms their of agencies hear. just we Just Retail That agencies of breaking just to much that buys funnel accept Media at getting versus a DSP and -- the in sort that set of ourselves general, variability helpful. hear the from from spend be from we bottlenecks? Is by how their relationships to existing in Networks inventory, that and you just that variability are take they would of how aside or was fragmentation

Todd Parsons

given with in feedback. solicitous the just that user discovery And Mark, the our CMA. them and that is same a What Sandbox lot things CMA Google of many our been begun. The Privacy to solicitous the say through Google then. The work I'll might is rollout. timing one how well who presenting Obviously, inform board, are and of across they is help been stay work true the and first take feedback, -- choice. we incredibly very partners I have has are same close them We we the about the as to CMA directly in much of with have to the it as phase. to think can has supportive accord.

and thoughtfulness timing, say that still around So clear It's that talk I be to to it early would there's about get it. right. it's will process a

don't sure there working always this. business we're our with point course, closeness continue make And of sure any to those making that parties disruption, we'll expect all your to business from we that disruption. about no So disruption is in

Megan Clarken

MAX. in Let me jump on

the to I it we're a closer the and see we'll to firstly, its second I So continue just increasing that that much with feet for we find their from $XXX expect said, million there. access the so to ecosystem who, in to. quarter, again, position MAX to the grew as them we uses agencies we're $XXX terms MAX. through feel get has presence in terrific And -- million put got consecutive getting of tools mean like

tools broken know, the that and we you're partners own buying out agencies. But with retailers get them. with them tools place they now their new where of own and the things, scheme since for of getting already of and to are work partners and multiple noticed we've to is what is in in closely have a the building that their very lot And media, tie we're and across couple years a particularly retail to that we One they the especially of retail workflows lot you've things become think need strong have very sort I agency done relatively us. a media, closer of them, vary, of

looking buy coming before that's together. I in bridge product enables same across the is place, the just agencies about to get access one tool of They've to are remember easy SKU-based retailers retailers, MAX at things time. had before. across retailers retailers sorry agency access a multiple one a through what to for the never -- are go have an to those actually buying retailer product one which brand is to through or they this And it talked point. which that for retailers, sorts where had them those so exactly are multiple we've So put appearing make

tools and closer as These continue market our XX terrific retailers, it some to bridges just we the are are over what boxes that that put And bring sort So together stronger. getting talent relationships and us is being retailers. together. brought exactly for with of to to Criteo understand agencies last need tick roll only are closer the we've we helping to months with that

that front in now the collaboration have here forward. going So with agency and us and we of we're really excited about what's

Operator

Your comes with Arete Richard from Kramer last Research. question

Richard Kramer

question cross-selling renewed how bringing to together? And of and focus off alternative you retargeting. quick materially of at for A cookie sustain you of Media third-party enough comment IDs are absorb now about Megan, scale solutions President now the of expecting don't much can Retail to return activation, performance early Outside to I that, where Brian model in elevation to Retail maybe first-party quick CRO Retail of funnel a your and and if talked Media, any in be you signal inventory growth and mentioned with Are on data, couple it's do retargeting. ones. how performance you the sort you're and see Todd. to and you full sort that too Media, would of know of and of XXXX? to closer on

Megan Clarken

question, that. performance from Good questions all tell. to -- good it's early for thanks The everyone. too Richard,

'XX sets read thing covered we where lot it they're hard on, 'XX, we and know, earlier maintain doing. think is a are we to until we a Google is relies you that closer exactly how -- up get on, I this that little as what to timing their for but and

into of me On much say the just shuffle read but let couple things. internally, nothing a that, to too

done, Firstly, I'm to do we efficiently. believer extremely can around who very shuffle much we when professionals strong need having for team and lot effectively and need people of a things do a of a things. quickly And even to

of think challenge the around. opportunity to, performance what from And it's that, we the as to that base power of to, we to base now a AI that doing you the that tools and -- Criteo can opening around a hear the into something you've the from to. changing Todd the access close the of remarks landscape is AI have sign stretch data capabilities have can said that on Microsoft's And high-performing is at what that's I a just Criteo, that that top just should the a of read most it so one that to objectives the give one But access of sits want move professionals bit a on who thing here and say make organization. I also and throughout also, last I'd it's drive in read learn sign in accountability us our excitement to the also the you we've top. And them. little to sure we got -- I bring

be both sits are creates top able our to that Media the power which and to this business the make the on our of want and that that And we our bring really Media very I are exploit and Retail power sides core, performance addressability, of of from that clients. benefiting out our power of sure the of. that together. And of this of to strong two Performance All foundation

that's quickly all the just are can move I can have internally, make that that that so and around to we was around deliver team do that And to sure they about. effectively, team and what we I athletes, the and and expect move

Todd Parsons

piece. can -- the Yes. second answer Richard, can I I

are scale up, like our would at to company to of the first all, that think investment approaches don't the with I in addressability into those we other us need future. the successful deterministic alternative a see Hence, that IDs, we ID. scale least data, -- tied alternate be not along

today is to or have outcome. or any that retention choose to that's the What alternative complex user look still best of what is an performance want So between for our at we're find IDs. want don't it to time want them decision sure at we a them. what for emphasize sort make made we is possible we that I exactly. do the And to role important at when run doing for to customers make We that retargeting

provide alternative our go third-party prongs and but strategy have minimization. that can't we we're been customers needed them addressability a hence other of and of the to through one the partners several I and say doing testing, So we complexity different last all of have replace is work also having of making described earlier. The Megan that that data them that would our scale not of variety together the them cookies, work without choosing, thing testing doing the ID

is data, in can as very environments, what proving learning excited and get to things our that those that advanced of counts models we're what identity want about data together say AI well our time, use addressability less models with see early data What advanced we're talking. data of go talked AI how that to know and is too to do stitched letting lot of I on will being that less much and the our say aimed and at and perform deep and we we graft. It's the know and minimization assumes do deep that strategy needed learning do forward. squarely data. about teams than will performance at You what out I and develop very is we over can with say, you to signal today specific but I level what how a say

Operator

further over at turn questions the time. have Dambre. We call Ms. no this will I to

Melanie Dambre

a for Megan, call questions. any available additional for our We're now everyone, Have great Sarah for joining. you, concludes Thank day. today. This and Todd. Thanks,

Operator

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

may now You disconnect.

Criteo (CRTO) 1 Aug 242024 Q2 Earnings call transcript