CRTO - Earnings call transcript Q3 2024

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Operator

Good morning, and welcome to Criteo's Third 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 of Investor Relations. Please go ahead.

Melanie Dambre

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

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

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

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

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

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

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

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

Megan Clarken

good and us all for Melanie, Thanks, everyone. Thank today. morning, you joining

I'm transformed, results. ready inherit is this brightest decision clients, of which my conducting This and and X as shareholders And winning thorough team, future that is enjoyment and ago, and Board to being quarter's the role company of retire was in the well. strong part The CEO a momentum with progressing up especially me, serving As this you the will from CEO Criteo journey months a my biggest update meanwhile, ahead. to plan new and the given announced vibrant I our bring tough positive for the and industry. The our fired Criteo. of I find search,

force Commerce driving trust as leadership who behind prouder our leader tech. of I the be a continues ad our to cemented at senior place our into our we a plan to alignment the execution hard powerhouse is team a strategy. and retail of momentum us. couldn't Media ongoing and Our be successful organizational media that Together, Criteo work, position in the clients core team's the testament with our global have in turned the to

transformation Looking years, past back of for double-digit on to our set ourselves achieve margin the new strategically consecutive growth third repositioned on deliver heights expansion. we're X company's and as over to we've sustainable our We're track growth. year

around no Over the transformation, and digital at strong our plan throughout business Media the of we're wave and third-party platform capitalizing a cookies. We've our brought the longer on our advertising. demonstrated industry, we've the resilience ratio. saving the changes positioned maintained in next to our and now demise We of years high of life, vision forefront Commerce

growth Retail looking Media on operates their several Commerce and recent to social Performance by targeting focus capitalize their of increase and Retail of Media to to the to slowed facilitates taking focused social share devices primarily showed SKY media. platform purchase consumers by ad Criteo tech Media, advertisers global with on Media. in selling ever by leading X%. The social the Commerce extending shift and the sector content retailer Retailers brands, Media We platforms. before growth while linear of and for TV from and independent solutions choice are as reach Commerce who the fueled Performance on surging stores, fastest-growing a web. words, this optimizing shop segments: and advertising into open shoppers on across trends, the Media addressing data they the rise Retail came for the sales. Today, engaging to while and key beyond. from web the and our have slowed are sector X% brands the than landscape spend search seismic to Commerce The In exciting. high-intent company foreseeing of e-commerce, discovery quarterly the and on buyer targeting and future digital other growth most more the buying now and growth through on on Media primarily is X the or overtaking are digital shoppers journey. hyper paid XX% and the their on focuses advertising in sites advertising. We QX, open of are incredibly It's in Media high-intent Media for of direct-to-consumer search selling consumers of global growing

Media XX journey years Our targeted positioned demand relationships, With our convergence rich and these that address. predict opportunities supply the represents uniquely of outcomes buyer from of and to side Commerce deliver from is the ads platform AI we to data and purchase. throughout commerce-driven Criteo discovery

Our platform commerce unified center a vision and innovation experience. around

advertisers build with strategies more audiences and enhance performance. funnel empower efficiently reach, optimization targeting commerce to integration AI-driven third-party multichannel data and seamless Our goal ad full improve to to is personalization

that create as Go. we in We our matures, growth tools and improved refer streamline and clients automation introduce One set Commerce such and work platform capabilities enhance to latest to workflows up our performance efficiency. efficiency enhance is opportunities. easier, this As make example

setting Criteo's can launch set X an using Clients in as few optimally tool clicks. than on to XXx campaigns as Commerce take advertisers that reported Go. have and other longer next-generation configured up allows Our create campaign services

targeting creation formats AI audiences and results. advanced and maximize ad and management to Our automate decisions campaign streamlined and

an performance. activated and Our recently has low importantly, with lower a beta cost churn stronger completed testing in shown spend media to serve, increase client most

Commerce comparable path. streamlined on We're campaign while Brand's achieved at and Go. setup activation increase to in a XX% also ROAS example, keep through spending benefiting Fashion moving excited Arena from For this

that despite to QX robust with growth showing year-over-year as delivered Now to line leverage turning we grow. to I'm achieve comparisons, strong we our a results. report top pleased tougher quarter ability operating

doubled count and strong the growth spend over gain share. media in delivered past the third both quarter Media. We've brand's to continued Retail Starting We X years. our and activated with successfully market

continued have XX-month trailing basis. brands spend increased We're and on Commerce our billion a activated by $X.X seeing adoption agencies. Our Max to of our X,XXX media reached

off-site the this as Criteo in retailers performance we're JCPenney brands the the and Max platform. We over growth the retailers secured reach, Commerce momentum. We accelerated growth record QX to supply reminder, scalability, in Media Metro spend to up stores. And and significant our Commerce Europe, the team continued our Media expanding agency X XX% triple-digit we're for achieved compared to global product category. with also lead In fashion Now APAC thrilled its demand we're and United the exceeding welcome governed to who another AG, demand to and thrilled ODP added and X recently through agency department in chose million We're sales work footprint with element in more remains choose -- confident Airlines, with sorry, our broadly. partner expanding like $XXX presence AI-powered Criteo quarter this our spend We're a Office excited U.S. region. is experiencing In monetization. with help power These to increase with scale rapid retail partnerships office the Depot new Flaschenpost also agencies in HoldCo site comprehensive our Commerce HoldCos Criteo growth in U.S. retailers and of U.S. in in in Solutions, broadening expertise. We're new critical a the in large Business proud and in we offering, maintaining unparalleled from This flywheel. Rohlik, U.S., worldwide. QX,

and make Commerce Our SSP access Airlines allows Grid its through available first-party them for broad media any by DSP. United connected to audiences curate

in Costco data client is across to partnership Criteo ahead us, the reach very has early days, with its web. slow U.S., markets. still see the gaining it's while in another and tactic monetization. its to we with has leverage other existing potential more for recently Criteo open partnering And enabling Costco and do and been this offsite off-site interest deepened consumers traction

sharing retailers conversion lift seen us. in-store Retail per the performance and data leveraging doubled starting and to retailers on-site We revenue data a on obsessively offering our More than significant a our campaigns. compared from existing focused display retailers in with our offline display our XXX% in on-site these customer -- in-store increasingly seeing typically strategy. We've Among formats more contributes year format, data to Media are average Media of an top catalyst sales campaign ad continue sales leverage retailers share see increase match on-site customer and a we fivefold We're in display others, XX% ad enrich our doubled of more a bringing with behavior online to India. user in move offsite performance ago. Using doubled attracting alignment we've results in ever exposure our to a first-party we seamless before. brand closed-loop to relevant This as lift in-store broadly, and also see between targeting, measurement. Criteo and we've that We Retail and with weeks brands better growth campaigns in performance Incrementality as advertising almost North this trust more the we growth with of America of expansion Criteo's APAC, X experience. Commerce important retailers we're Media, number show data see And than demand shopping of and strong online. their within display.

growth. sales fully to leverage also our measurements We and brands to boost have insights put

partnership lift and in instance, Oikos sales in increase an Flywheel, product daily in XX% boost with Danone's overall XX% on a Albertsons. For visits, a achieved brand XX% page sales

Microsoft. to Turning

design with our across already update integration well other retailers to collaboration investor transition exciting of are demand retail progressing Media Microsoft during continue and map talk more several regions and We for Retail to which XX. collaboration underway. to our The advertising on we'll media strategic all clients stack expect about in Microsoft to November out are come. AI our advertising our RFPs and XXXX We

named the our proud we're in Retail continues Media from Retail work IDC, a in recognized, Leader be leadership that and Network worldwide as including to has Media by most our Service Intelligence recently which Market of us Providers. Lastly,

Turning to Performance Media.

large-scale by spend consumers our the clients reach XX% modeling retargeting buyer Audiences driven both leverage Commerce remains AI-powered defined technology to up we our shoppers. journey. across XX% Commerce momentum and and entire Our media in-market of using data audience Audiences from commerce Today, as is

budgets showing our product across success. We've additional thanks with in creative entire tests the AI are images is and technology backgrounds AI-driven our GenAI portfolio, enhance for click-through our also We're and to leveraging Our innovation continuous increases performance to future AI-generated driving promising enhancements. setting growth unlocked stage rates.

Our across channels, also benefits including social. and multiple open they when plan, seeing web are and optimize buy advertisers

within XX% when increase XXX%-plus lower in They a a For Instagram after click-through example, their for cost increase saw of and sales their close threefold by campaigns. able Facebook including and revenue rates achieved only to to a in Electrolux were month activation. the retargeting

us, and integrate full a we commerce where are move more in-market is future our the part shape consumers. this that our AI and time just relevant are we believe to steam plan This strategy of consumers many with across to to digital we journey. any to solutions sources social ahead are. to environment beginning to environment buyer continue For advertising. We the access into end, bring our to when make supply and providing optimizes continuously access several on comes the sure at of that signals recommendations addressability have To the

across people-based As everywhere data. every part identity. relying recognize Commerce the full of able shifted from intent and has focus and on and format our without transformation, potential product-related unlocking we to and environment shopping shopping of are experiences commerce to believe our we're truly signals

apart Our patterns touch conclude, our our more our of outlook. and This laser relevant over the our performance is journeys product world's media drive more than Sarah, and strategy financial shareholder types, before the advantage and approach we points. intent shopper across call in platform remain and details drive on create the positive value. With to focused that, recognize leading deep who any on continuing to environment. To results commerce to of momentum, shopping execution hand models are and us learning taking superior I'll provide we're in confident to will sets ever signals

Sarah Glickman

in was morning, headwinds QX foreign Thank million. QX $X and operating currency, X% strong everyone. to million, $XXX line delivered enabled was million, including Retail by cost increased and on Media, in We QX contribution grew growth with and $XXX performance This by and quarter. Revenue up X% X%. good year-over-year ex-TAC of top At up leverage top driven currencies XX% growth you, in Megan, from XXXX. growth continued organic by contribution strong Performance this disciplined management results ex-TAC of Media, constant again

in rebalance animals increase apparel by spend growth by with strong at and mix year. pet back-to-school million, in beauty. supplies QX. Starting of a constant Retail our top observed followed of grew XX% representing category, over and QX line XXX% there Media, gains was across continue solutions advertising top the and season, with all $XX we year-over-year to and in XX% was During business revenue in currency ex-TAC year-over-year, increased on unconventional Notably, Overall, significant shift an our categories. health we back-to-school our in $XX to new million. last XX% Contribution

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

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

we expand global side, we and continue On the scale, to retention, strong footprint. client our supply have

start track transitioning early some on in monetization Microsoft retailers technology advertising in on-site are to stack our XXXX. We to

namely demand Performance partner In Media, market. the brands our was share brand media other X% after now at and to bookings, we saw was revenue CPG about strong side, $XXX spend We Retail continues from from gain million, worldwide brands currency. constant agency and X,XXX global as activated third growth year-over-year the in ex-TAC new up with XXX quarter, partners On outpacing our channels. In the contribution grew million, robust $XXX onboarding Media XX% quarter.

consecutive quarter up Commerce strong X%. on year. for top XX% grew We quarter, up continue growth the to in the see Retargeting third Audience same XX% of targeting, growth year-on-year in last

We to budgets. multiple typically that larger performance combination of see are and drive tactics pleased the better

media XX%, in initial benefits retargeting ago. Strong and advanced AI-driven database in We stores and budget. stabilized notably down U.S. the our classified XX% saw spend X one supply partially Travel year Our exited in and lower spend our quarter, performance late Audiences offset the of reframing optimization the and increased in primarily trading remains lower This fashion from ex-TAC large technology were retail. in to Commerce a algorithms enterprise uplift enhancements department vertical, latest drove fastest-growing quarter. integration due despite business recommendation for of AdTech again vector services U.S. strategies reducing learning performance contribution our followed marketplace. our range deep million AI-driven engine also into this a and by the from growth lapping double-digit our is demand from up with their the clients marketing in by their quarter We lower trends. AdTech clients the and

at XXXX, resulted operational year-over-year. resulting delivered and months, broad local million high base retention to client client a up XX%, roster recent partners count. We have small diversified adjusted intentionally efficiencies. We market with and This reseller regions basis knowledge client of of QX year-over-year, combine Performance select EBITDA Media in have points a in in $XX EBITDA in XX% margin adjusted In up XXX lower remains our to of we XX%. close expanded

strong in resulted leverage. growth operational line top Our

We to X% reflecting operating by and on investments, QX bad year-over-year, offset also lower Non-GAAP benefited targeted rigor expenses from some allocation. increased partially QX growth hiring debt expense. planned resource shifts continued from

growth our As investing said optimizing by efficiency. operating for before, and transformation we've we scalability areas driving model are our in and

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

of related million down IPONWEB's including QX was acquisition. was P&L. expense the as in amortization $XX Moving founder million to XXXX. $XX compensation Share-based $XX to granted the million, and Depreciation shares part

million $XX Our net income QX amounted our from million, to operations were income and in XXXX. $X

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

up adjusted $X.XX EPS XXXX, was diluted Our year-over-year. QX XX% in

position flexibility to allocation. cash million flow planned significant debt. seasonality had financial cash growth a We the execute and was free in disciplined at cash million generation $XX QX, liquidity balance balanced to capital million $XX was Operating investments. our and and and with September, strong total long-term robust in strategy and sheet continue $XXX and end us from no gives solid We CapEx which reflecting of financial benefit flow

confident financial our and strategy strength. We in are

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

a buyback stock XXXX, conviction significant million million we including $XXX in share and to now opportunities QX. We XXXX, to record our million of Board in months $XX capital our million our have remaining in had underscoring of of returning end repurchase to We value. authorization. $XXX about long-standing repurchased first September, the shareholders At deployed term the in we intend commitment of long and already X $XXX our in delivering ahead shareholder the of have

XXXX. we of which year. with Despite as to this uncertainties, the for holiday today, XX, deliver financial margin expectations confidence double-digit season Turning our and October to growth our outlook, the expansion reflects entered macroeconomic

tightened segments. organic we our XXXX, year-over-year now confident XX% single tough XX% mid- growth in and meaningful grow have the range Media, For at to XX% towards This of X% constant digits Retail ongoing given which in of contribution our acceleration to a range constant at our we contribution quarter. In a growth now our we performance currency XXXX. are strong now our in largest ability in XX% grow ex-TAC to expect our high with guidance to QX, ex-TAC XXXX. to high Performance to compared we and In end we expect year-to-date And comparisons both momentum, in currency Media, XXXX. as to is reminder, is in grow

areas in XX% top XXXX to Our continue to and of discipline leverage expense has of operating model our strong reflects confidence been a from to line our growth, as the XX%. projected of margin growth. for transformation This adjusted increased invest range operating we EBITDA in

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

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

we conversion for ex-TAC of contribution continue cash before nonrecurring and to by $XXX drive advertisers any million $XXX portfolio. free as flow performance to to sub last of QX product a at XXXX, largest X% we items. The expect constant of of across we approximately rate superior X% year, adjusted Lastly, quarter our currency, XX% the EBITDA growing million, our expect

comparisons As Commerce has we season you Criteo, to is year. spend. advertising platform, know, we It political holiday QX, in this that as also shorter a no have important Media have a note and softer

to in season. We ready is team during clients Cyber impact the for QX. from Our holiday ex-TAC year-over-year and changes our contribution to deliver a -- to ForEx minimal estimate Week have

EBITDA expect the business million investments million. $XXX strategy model. planned This the hires quarter. In between and includes and resilient have from a of shift $XXX the quarter we We adjusted fourth in and closing, our strong conviction certain timing to third

are I'll success, Retail to with Q&A the are update shareholder and Media this with of forward November conferences We for that, and on our to look positioned meeting road turn begin many quarter. And to we it to session. on We XX our you maximizing well continued committed value. investor the operator in the over

Operator

comes Company. And of Instructions] the with from [Operator your Mark Benchmark first question line Zgutowicz

Mark Zgutowicz

questions about I rate, on your expectations Nice more progression. couple you you're Retail just XQ. up Microsoft you're set a get update. our that of to bit yourself separate there's But just of in on know Retail Media take certainly going above OpEx around Media. that incurring any incremental a address A demand? And Retail then there question as talk Media sort curious that if to

to demand, transition? particularly take of in-house about curious XX believe we next Just so your largest can clients variables that I following sort transition talk anniversary as here what that for you'll in maybe rate could -- anniversary expect you months, your XQ, if

Megan Clarken

been sure step as you. off are expenses any -- don't across. hear are the kick a that if Good to I are say, looking we types platform for the and lift Microsoft demand to the of it from is to provide I'll to take as Microsoft the take set advertising really Microsoft. on move getting services about of who's but as all moving here, a of demand us their if there the team the the anticipate have have coming cringe And doing It what for for they we from who clients who at that a clients well. shift, acceptance things of look I'm platform. we them from through We delivery operating back would place and significant in of client side the the fact you Mark. replacement looking or

kind the any We have platform having heavy with expenses work. we operating built. this anticipate don't involved So of

Sarah Glickman

Yes, I Retail Media Yes, us. take can is really well doing for Media. Retail

and So all a XX% clients increase in the activated spend contributing. media

a we've of seen there. lot So traction

the the a continue you -- of client, very them, are And they and terms 'XX. move say, would with at will, QX that QX transition good year as the course, beginning into That closely year. largest and pace In starting to to into kind of of our now of having we, transition more at slow we work QX. a the expect was ahead coming

rate 'XX, have the reflects year of we're new terms and most talk the renegotiated take And in expecting the year we take some that are be has the retain will and down continue and always In we're on continue anticipation of giving that but to weeks. to not to performance XXXX, rate Media we that we with to for been the and as we for Retail move scale very But bring to contracts in have that to in expected coming rate we take as more excited guidance year is to expected. scale, see My delivering. continue have well. on and we're our contracts, of continue would scale,

you on So forward Media chatting Retail at Day. our to we XXth all look November to the

Operator

Mark question the Stifel. Kelley line of next Your with comes from

Mark Kelley

stabilized. down that the said you look expand from with does one the you then it I on Can what I in us you that particular, like maybe AdTech you I services the help conversations moving here? And Is half I pieces I a comp second comments was guess. retargeting I is said of guess, can tougher question think than there? guess XX%. client, guess, the bit? in drove maybe this another your a we QX expect strategy forward? that something in at And that are point? maybe the your just quarter can first going growth and with what of retargeting clients as around year, significantly think

Megan Clarken

Let couple brought the AdTech it -- IPONWEB we and of those within products from It's services and start to products I'll across me just there's services, a across of question, then with acquisition. we remember But primarily that you'll on when we made their capabilities. were that of brought of And X all we remember, may or made course, IPONWEB. when or of we board X AdTech after pass Sarah. acquisition, biggest a couple

centers which have now plan one can mix, around the we're normalize issues it its to seeing it, strategic in it bring not or the take IPONWEB and away So that this with Criteo, is product, one we the particular, sure which is in make client. line web in in susceptibility to that to we -- a that we can place

Sarah that we're for that's detail. across there so miss more to doing, -- in the And services. I'll what is AdTech and explanation the particular pass that's of

Sarah Glickman

a mean specifics. couple Yes. just I of

has think did what as coming stronger So to I agree that's trend. partner, spend that QX. we in did QX quite AdTech to the we and from in see largest started impact with about the that call, we our partner, -- I can talked us, would lower you large significantly this, isolated continued see, out and I to exit

ad services SSP tech that X have not that did supply we that, and has prior and revenue that impact to on anymore. related addition to think that partner. I Also calls we getting we've in SSP an discussed we're -- In

to reminder a we in X%. were that just retargeting, at X% of into terms QX coming In QX at increase

best strategy. good that. But talk So think about the Todd is probably person to very as about the a I retargeting

Todd Parsons

the to a addressability the Retargeting is And use beta, as Go you more, is customers good which signs growth mix. progress here acquisition, their really way obviously, we've in Obviously, with the initial pardon to marketing enables is audience as just a about Commerce not interesting early there. to and our also And important strategy success an the Commerce part some our us retargeting resilient. exposes customers we're headliner customer a easier Audiences talk is it which -- for Yes. organic seeing we one. which get to really beta and success our in on Megan that business. but had sign acquisition me of overall tactics, Mark, of the tactic story continue on being heard

retargeting So being a with mix of resilient the core. at tactics

Operator

of next the Arounian Ygal Citi Group. Your question line with from comes

Ygal Arounian

on first the guidance. Just

a I that's where from focus investors of morning. the lot think this

at for you it of down a the contribution guidance the look does If XQ, a imply little ex-TAC. in bit step

exactly has what's customer? impact with the macro, seeing Can you're how guidance, kind the that the holiday no single IPONWEB lower much what guidance I the did You like things of called the of driving you full revenue XQ? high sequentially bit. a that out Sarah, in spending. a know, unpack little certain year I'm rate you sequential -- by lower sure end shorter season, political And not growth

Sarah Glickman

I we very tough XXXX. all, in that a QX I see. just first comps of mean, have Yes, reminder

the last does QX lapping the in and would and range, we by AI Audience Media plus more That's reason, year, key and we services. up and the QX Commerce enhancements that that area. last Retail far the significantly were of comps experience the I impact the AdTech definitely saw back of come isolated largest QX it to tightening is in quarter year. to So just in particular, unpack, are say But significantly on from we

the key that's So reason.

holiday now, waiting for Macy's over, we're the is out political But is season. think has as team cycle is not crowding I on right retailers is, ready on I the would seeing that until to which the spend say, surprising. I an supply go we think and the we political important are seeing already. resell said, the are one some what because point

range. expecting during So key reasons those are a the season. just really to the terrific holiday we the why we're tightened But do job

would which enterprise go are have it's that changes say, change about structures clients U.S. larger but just expect we including they a I the piece, gone -- to in own with we changes. of news that transitions. through rebound, some talked And as couple other The marketing strategies those there CEO Americas, temporary, in through in their

So about well. uplift really top and for also range, in, QX feel adjusted really also we future, in good the but the to the the good all range retail only excited end the in the media not EBITDA about feel as very of

to year out strong. So we're excited to focus continue

Ygal Arounian

little color maybe the as have to Media, has Okay. maybe called going Airlines, be, how like so think in called On you opportunity here. a get than the Retail the about like growth growth. more more few help growth you could comments on I past? of United of out, off-site what others, frame And in a partnership overall? drives a driven it offsite Meg's just us And we're site, bit how weeks offsite much kind again, feel know and I and maybe then lot out with you the in Costco

Megan Clarken

Yes.

into and would speaking by spend the for we're going into it as is Let hoping we're QX very in encouraging very me U.S. and start Media, search is fact when be. right saying a that for the we're the And share price that's XX% large Commerce space. the social And to is us. encouraging. growth It's in this across that's that winning we the against as moving where

probably little we're a ahead. fact, bit In

So the progress excited very, very there. about

to Retail just in some that already, out that roll clients our to the cases a know, particular, big just but off-site them for There Media, is of that seen that for whole they utilize benefits part their across time, lot we've come starting use to and and of their a lot of while, as have started some a Within as them. and been -- to strategy. one strategy are some have in Media had Off-site, the we've them, are we and as available do Commerce there see Media, to very some life. Retail capabilities clients of bring you move we're

So we're move. excited about that

We we're seeing what also in are excited about display.

some today, like, see ads format, traction. that is starting So sponsored dominate we're hedges display on the retail good if we you another to and

there's here elements them then And on-site so well. better as sorry, data more producing we for start out of results to brands come -- retail today off-site and there. And and other that taking

cases to to opportunities still which unpack use of So just lot growth and for a us. speaks

Operator

line question Anmuth the JPMorgan. with comes next Doug Your of from

Bryan Smilek

for Doug. Great. It's Smilek on Bryan

Just mentioned a contribution the to Performance within increase double-digit range you I million drove have think Media in XQ. start, AI performance in driven enhancements ex-TAC guys

And So which to we of can differentiated XXXX, are to compelling monetization and you investments strategies? lead guess about as drive I other just as critical a enter curve continuing talk their AI? the product AI into competitors

Todd Parsons

to in? jump me want you Yes,

Sarah Glickman

Todd, yes, through to it sorry, give Yes, but answer Todd. just was the I thinking

Todd Parsons

a these or one Obviously, sell We with that the tactics, retargeting that spite the we sits any fragmented of important that do whether investment space doing of addressability center a And and at efficiency we in, there That's on deep and in AI way the one activation that a targeting for really across fragmented in don't to all great. performance. more goes and few the as And are to different learning to drive sell challenges space very talk using just company. on-site. AI strategy factors our effectively we're of about. performance operating

of our core the that's investing. So

consumers Beyond That of dimensions. that, the with to or really experience their discovering changing is a commerce choosing responding AI-generated person be optimized outcome stage to to as for in the researching that buying on-site or ultimately, experiences creatives, it that a that goes to brands. One are off-site rather exposed to retail web is a journey on-site advertising couple or are between so on that creatives they're are dynamically achieved. that sure open making is media we buying goes those or deliver the to other there advertising important

from important things. And operate really quickly, strategies for to or the the service way respond So clients to dimensions. more requests there X third products we very our get itself way build coding how the a we company Indeed, quickly. by are all that a one our internally are is as Those more investments the in AI. we changing their perspective, X impacted key are

Sarah Glickman

teams but and our It's already terms ensure our would we're our center of through well in gone couple it's more established. that well on smartly established, to our And Yes. in in over peers, of heavily transitions of optimized. say of infrastructure I the heavily last invested to wouldn't -- terms we've years compared invested data we've kind in just thinking platform, dollars I core investments, of, our as if the say, of we're well,

be But and do you will continue solid We continue from our to talented would the say that an would base optimize expect about spoke very to structure. to ultimately, investments incremental would incredibly Todd everything I just engineers. AI of

Operator

Your comes the line Fargo. from next question of Brondolo Alec with Wells

Alec Brondolo

the demand Microsoft feedback relationship. side. the I I on the appreciate about of to the would side supply ask love

customers give the maybe the Could Media line best thing and in sometime going that's pretty you that at update to functionally least it's when end purchasing think XXXX. today? and an Retail us time exciting know work might inventory up you how as just I on as

Megan Clarken

Thanks the coming Megan. I We you're joy. our Day. to this hope so to don't Well, want is Investor question. kill for

We about on November will through you more XX. that take detail

between have is for so to Criteo's advertiser And to So side during channels way Flywheel. the of our the Media us speak to of the the retailers Microsoft It's hard X.X team a that into across I our I an that their Retail our critical don't pretty to that. an returns onto or Media spend prospects advertisers working their the are And ahead retailers -- there want other are and exciting that the get Retail network of But establish bring because demand clients the as connection comments. But supply. their demand by with Media critical that so opportunity about of Retail there. is more for demand into excited much part coming way. will come as it themselves. are opportunity the from we and demand prepared to million in stack, DSP talked

in motion at so come start with implementation of is -- to I'm we Todd to And things as as looking Microsoft. sort get soon this things rolling The flywheel going implementation. all

Todd Parsons

Implementation is underway. should say, carefully implementation through thought underway. and I being is

that's into demand make Microsoft just but advertisers which our not of matching there in XXX,XXX $XX design opportunities. Megan's billion we're side, point, unsold want are footprint those we about places about where to sure from represent the to architecture and also So that Media whole Retail

we considerations roll sure right and XXXX. now actively as So it in want getting make done an it to That's out to eye there as seamless right it being with right. design get are the we're possible through that very going that's to in and different starting to

Megan Clarken

to is that shopper point not as that available an but that we everything get as have have we've dialogue, express is that the to side finish make advertising just there to in end-to-end Media, supply to their opportunities. we to that use of on retailer to to There Retail capability access started Just get those advertisers on front sites, on a also will is slew of journey. demand shoppers well, in buyer we

this is a big deal. So

Operator

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

Brian Pitz

a CPG on color your seeing some how kind whether by QX you update softness when tech, you We're verticals. it's on maybe of retail do meaningful in additional and separately, CPG, should is contributor then hearing stronger And entertainment, be some consumer Maybe category thoughts broader into to and that funnel. scaling on think discretionary, and specifically quick 'XX? earnings? any a offset Albertsons, maybe lower broader although this Are retail, it

Sarah Glickman

holiday see, bit we it's a to the discussions have Thanks categories to our Brian. all said, earlier. Yes. for we would on seen That consumer terrific some which expect definitely spoke being a for tell season. question, with would a I and have We QX. see say the early wait I about and good retailers,

a point, color, have they consumer the where Retail quarter. closely. But holiday to that to know Media, And the strong going of continue especially paying couple that's one track areas, we we in spend, key very of angst we And obviously sale. And to convert announced sentiment. as into retailers see this but the close of earnings. course, next continue just there for quarter, say, think So have would attention -- QX. And coming post related strong in I that reminder really I they quick to I we a we -- would we some, then as in X Media, that season we'll say a I'm to very, no ensuring broader Performance well perspective new verticals their in brands QX a during additional where is keep to a your

is terrific Airlines. add. Depot And United new So a then also Office

maybe think relationship, were would So definitely I or for of in that Media seeing to take terrific going strong particular, I traction they -- growth. more verticals, as expand Commerce we and from come say, multiple mean, continue a -- terrific to that the I away we out contributed there, I Day. to into and we'll Retail our say, XXXX. On address Retail we're across that Media, question to And as in would Media expected, -- move Albertsons kind expect

Operator

Next from question Tim with the Nollen of comes Macquarie. line

Tim Nollen

And give. through Or you're now back it the be at to anymore cookies But on I'd think difficult you've data? retargeting business so like call at your just point? retargeting, is from it's today us to to topic cookies. this come is we next year? willing gotten because this first-party probably least almost is very much impact quarters not using on know I update got have X my about an to I relevant dependent you'd if cookies has question almost know how really for of which give I talking don't in row. grown a without

Megan Clarken

demands said as Yes. work plus But multipronged -- of consumers continue should we find our on dealing -- but longer has with across that Todd's way in our I has on. works with pass product no the make we've through because Look, sorry, will and in journey. R&D the their our front opening Privacy our we Todd. don't we but business I say, work the not remarks, we which based in Google to and team think to to all moved cookies, of to team, life, teams and gone buyer and the work our the to away run I through come signal That's Sandbox on strategy, his that approach they say to their center all [indiscernible] loss

Todd Parsons

Yes.

there's So things couple Megan's pretty there about of point are to encouraging Privacy that a Sandbox.

Sandbox make our that around itself addressing of requests to recently seen Google actually Privacy function key of them came better. a have may couple to You

product knowing being just So actually improved. that that, is

that anticipated for towards of and the addressability part it's said, strategy, our as is for not sure Megan out the means the is buyer Google cookie that user using anymore, is cookies overall a the have tie the partner purpose consumers entire drive mix as we're it's retargeting functions is influencing a a is Further, year, choice this and because important to what CMA retargeting. tactic are directly to and Megan advertising So it we more doesn't next of personalized of a keeping making our around a to experience. And that that net It's this a view just commerce to very in of still able addressability. just working encouraging. but very one that part strategy strategy better as the upcoming all implementation consumers importantly, in of reach advertisers laying address journey thing outcomes. for to was consumers picture been and to our good have And on bigger our

Tim Nollen

Okay.

said You it I that given impact back won't the think last hot. year, pulled of basically cookie you call, had be previously deprecation next which number a for and

wondering just I'm that any there's update number? if to So

Sarah Glickman

mean think know latest plan we I Google's is. what don't I

strategy. exactly in And what in I so update overall we of Todd's not XXXX our our when assumptions now. guidance giving model we think, But and our feel our get and course, updates were we they're And doing, ultimately, will on to we in as point, confident guidance.

Operator

from question Next line the with Davidson. White comes D.A. of Tom

Thomas White

can Hello, me? hear you

Todd Parsons

can hear We Yes. you.

Thomas White

one Commerce Okay. A on quick Max.

deeper these more big What's HoldCos of Max? over about from that you in growth Max talk X, DSP driver tools the of or just adding next, quarters? existing of it the You HoldCos. you're growth is can of any with it it whether the say, just whether And think Any budgets? seeing Curious in main maybe maybe spend you you're using guys agencies kind mentioned displacing different penetration some the that X agencies? coming some Is at Commerce of there? are now? those kind Is the of color Commerce guys

Megan Clarken

couple A things. Yes. of

matter in for part demand and come of very well Flywheel this it incredibly a they've and a quarter. possibly time. big a XX% for this thing. long it's momentum agencies encouraging. This as through is been we as momentum, going be them very to a Firstly, Getting is are at this could what building giving time, It's is and looking is delivering at We're point of new now agencies good that -- incredibly for. they're well which asking

on think have advertisers. a for proposition to Media agencies, spend and for they spend I their retailers, got to shift Commerce a proposition, network performing a is see Retail which in better Media make, a of fact, viable

choices. there move most or with top supply -- proposition that network So and they of sorry, of of And sitting couple can a have they they go They more dollars the They Media. really go to those Amazon. more across Criteo. strong has advertisers. retailers for a go demand Walmart can other into Criteo to waiting Retail can And to

building it to and are that everything buy. results need use effective that they that momentum, the Tom, buyer about it's just produce to the doing So an and data them show is encourages sure making an agency tools momentum, that the

want add? You to

Todd Parsons

allocate media that building built. Obviously, said. with across important relationships on are Megan I'd budgets to From just with product a Megan of. what what it's that mix we're easy and already and partnerships very a plan perspective, have something sit moat retail we is here. top making Tom, sure on to the that strong we the Yes, agencies add spur that And about to talked momentum

which plays or bit advantage So rather our we're across retailers to XXX-plus you done, Walmart just it's that to can looking Amazon. because more imagine challenging than a get little

imagine you easier Commerce Max. it for come and across to space make XXX happen So will budgets growing, ultimately for the HoldCos can and those you through those into if allocations then activations

Sarah Glickman

everyone Day encouraging to And listen Investor Retail I would just Media close on XX. by November the to

question? more I think one we have

Operator

of Patterson from KeyBanc. line comes Question with the Justin

Justin Patterson

for to winning access of the publishers, divest This forced change access you more double-click Google your Great. and that question Google how to in market? do a bids could is or around and/or think theoretical If AdX regulation. is supply and

Megan Clarken

can Todd good a start It's maybe weigh question, well. Justin. Yes. and I'll as in

to resolution The options in just if way as changed comes timeline with could future to actually hard what kind the have the here incredibly happen could to in any into Firstly, it's is considerably. get landscape speculate out which of here. resolution the are the

-- we playing So to tend field. a do we support firstly, level

Google, happens dominated players. changes or strong do X to see the properties we will support AdTech that vibrant anything there. if So not it are the is a which be some that that by to that And industry interesting is of owned makes then sure and one, the from there are by course, X remains of what ecosystem

careful, if I speculation, you've any but fun be Todd of of the for it? think got kind we'll

Todd Parsons

Yes.

deeply back hold speculation. on of is What Google. different with the are to I'll more the doing work think I parts we continuing

all we know strong think is Google a very I partner of that ours.

might and -- to what our the for really is side not customers So other It's sky breakup we're more that attention that's But what is prepared or about the a from blue Criteo can that are helpful. whether there for of speculation people coming well you They're what's I ranges on that. happen, back say elsewhere. do confused about think happen while us. might while

great important equalizing, opportunity company. one as just as one, because happen, really these and changes So for an seems but observation, market not there's that's be the an this empirical to

Megan Clarken

very All you good Thank questions. much, questions. Great everybody.

Melanie Dambre

Relations Thanks, a today. wish is and for you for Todd. Megan, everyone, We call for additional all great team day. Sarah our available you, The concludes now questions. any Thank Investor This joining.

Operator

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

You may now disconnect.

Criteo (CRTO) 30 Oct 242024 Q3 Earnings call transcript