Criteo Reports Results For The Second Quarter 2018, Adjusts Fiscal 2018 Outlook And Announces Acquisition Of Pioneering Retail Media Technology Platform
PR Newswire
NEW YORK, Aug. 1, 2018
NEW YORK, Aug. 1, 2018 /PRNewswire/ — Criteo S.A. (NASDAQ: CRTO), the advertising platform of choice for the open Internet, today announced financial results for the second quarter ended June 30, 2018.
- Revenue decreased 1% (or 3% at constant currency1) to $537 million.
- Revenue excluding Traffic Acquisition Costs, or Revenue ex-TAC2, grew 5% (or 2% at constant currency) to $230 million, or 42.9% of revenue.
- Adjusted EBITDA2 grew 27% (or 20% at constant currency) to $69 million, or 30% of Revenue ex-TAC.
- Cash flow from operating activities decreased 33% to $40 million.
- Free Cash Flow2 was $22 million.
- Net income increased 96% to $15 million.
- Adjusted net income per diluted share2 increased 36% to $0.53.
- We expect Revenue ex-TAC for fiscal year 2018 to grow between -1% and +1% at constant currency.
- We are raising our Adjusted EBITDA margin outlook for fiscal year 2018 to between 30% and 32% of Revenue ex-TAC.
- We have entered into a definitive agreement to acquire Storetail, a pioneering retail media technology platform enabling retailers to monetize native placements on their ecommerce sites.
“From the conversations I have had with clients since returning as CEO, I’ve heard many positive comments on the value we bring” said JB Rudelle, CEO. “We are building on this trust to expand our client relationships with more products and solutions”.
“Our model once again proves to be strong and resilient,” commented Benoit Fouilland, CFO, “as the combination of growth, increasing profitability and strong cash flow demonstrated in Q2”.
Operating Highlights
- We ended the quarter with 19,000 commerce and brand clients, a 16% increase year-over-year, while maintaining client retention at close to 90% for all products.
- Revenue ex-TAC from non-retargeting products, including Criteo Customer Acquisition, Criteo Audience Match and Criteo Sponsored Products, increased 72% year-over-year at constant currency, to 6% of our total business.
- Our mobile in-app business grew 38% year-over-year on a Revenue ex-TAC basis.
- Criteo Direct Bidder, our header bidding technology, is now connected to over 2,300 large publishers, compared to 2,000 in Q1.
- Same-client Revenue ex-TAC3 decreased 3% at constant currency due to headwinds from user coverage limitations in Safari.
Revenue and Revenue ex-TAC
Revenue decreased 1%, or 3% at constant currency, to $537 million (Q2 2017: $542 million). Revenue ex-TAC grew 5%, or 2% at constant currency, to $230 million (Q2 2017: $220 million). This increase was primarily driven by the addition of new clients across regions, sizes and products, and the improving Revenue ex-TAC margin over the period, and was achieved despite significant headwinds from external factors in our business with existing clients.
- In the Americas, Revenue ex-TAC grew 4%, or 4% at constant currency, to $87 million and represented 38% of total Revenue ex-TAC.
- In EMEA, Revenue ex-TAC grew 4%, and decreased 1% at constant currency, to $89 million and represented 38% of total Revenue ex-TAC.
- In Asia-Pacific, Revenue ex-TAC grew 7%, or 6% at constant currency, to $54 million and represented 24% of total Revenue ex-TAC.
Revenue ex-TAC margin as a percentage of revenue improved 230 basis points to 42.9%.
Net Income and Adjusted Net Income
Net income increased 96% to $15 million (Q2 2017: $8 million). Net income available to shareholders of Criteo S.A. was $14 million, or $0.20 per share on a diluted basis (Q2 2017: $6 million, or $0.09 per share on a diluted basis).
Adjusted net income, or net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related intangible assets, acquisition-related costs and deferred price consideration, restructuring costs and the tax impact of these adjustments, increased 35% to $35 million, or $0.53 per share on a diluted basis (Q2 2017: $26 million, or $0.39 per share on a diluted basis).
Adjusted EBITDA and Operating Expenses
Adjusted EBITDA grew 27%, or 20% at constant currency, to $69 million (Q2 2017: $54 million). This increase in Adjusted EBITDA was primarily driven by the Revenue ex-TAC performance across regions and temporary savings in expenses, related to hiring delays, in particular in the midmarket.
Adjusted EBITDA margin as a percentage of Revenue ex-TAC was 30% (Q2 2017: 25%), improving by more than 500-basis point year-over-year.
Operating expenses increased 1% to $176 million (Q2 2017: $174 million). Operating expenses, excluding the impact of equity awards compensation expense, pension costs, restructuring costs, depreciation and amortization and acquisition-related costs and deferred price consideration, which we refer to as Non-GAAP Operating Expenses, decreased 1% to $147 million (Q2 2017: $148 million) partly driven by the fact that we did not host our Global Employee Summit in 2018.
Cash Flow and Cash Position
Cash flow from operating activities decreased 33% to $40 million (Q2 2017: $60 million).
Free Cash Flow, defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment, decreased 33% to $22 million (Q2 2017: $33 million).
Total cash and cash equivalents increased $66 million compared to the end of 2017 to $480 million.
Business Outlook
The following forward-looking statements reflect Criteo’s expectations as of August 1, 2018.
Third Quarter 2018 Guidance:
- We expect Revenue ex-TAC to be between $218 million and $223 million. This implies a constant-currency growth of -5% to -3%.
- We expect Adjusted EBITDA to be between $61 million and $66 million.
We are adjusting our Fiscal Year 2018 Guidance:
- We now expect Revenue ex-TAC for fiscal year 2018 to grow between -1% and +1% at constant currency.
- We are raising our Adjusted EBITDA margin outlook for fiscal year 2018 to between 30% and 32% of Revenue ex-TAC.
The above guidance for the quarter ending September 30, 2018 and the fiscal year ending December 31, 2018, assumes the following average exchange rates over both the nine months to September 30, 2018 and the twelve months to December 31, 2018, for the main currencies impacting our business: a U.S. dollar-euro rate of 0.84, a U.S. dollar-Japanese Yen rate of 110, a U.S. dollar-British pound rate of 0.73 and a U.S. dollar-Brazilian real rate of 3.51.
The above guidance assumes no acquisitions are completed during the quarter ending September 30, 2018, and the fiscal year ending December 31, 2018.
Reconciliation of Revenue ex-TAC and Adjusted EBITDA guidance to the closest corresponding U.S. GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures; in particular, the measures and effects of equity awards compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our share price. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future U.S. GAAP financial results.
Acquisition of Storetail
Criteo has entered into a definitive agreement to acquire Storetail, a pioneering retail media technology platform that enables retailers to monetize native placements on their ecommerce sites on a CPM basis. The 2016 Hooklogic acquisition, and the subsequent Criteo Sponsored Products solution, have allowed Criteo to partner more deeply with retailers from an on-site monetization perspective to reach and engage shoppers throughout every stage of the funnel. While having no material revenue contribution at closing, the addition of Storetail’s highly complementary technology is an important building block to enable Criteo to offer a full monetization platform to retailers.
We expect the deal to close in the third quarter of this year, subject to certain conditions precedent.
Non-GAAP Financial Measures
This press release and its attachments include the following financial measures defined as non-GAAP financial measures by the U.S. Securities and Exchange Commission (the “SEC”): Revenue ex-TAC, Revenue ex-TAC by Region, Revenue ex-TAC margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income per diluted share, Free Cash Flow and Non-GAAP Operating Expenses. These measures are not calculated in accordance with U.S. GAAP.
Revenue ex-TAC is our revenue excluding Traffic Acquisition Costs (“TAC”) generated over the applicable measurement period and Revenue ex-TAC by Region reflects our Revenue ex-TAC by our geographies. Revenue ex-TAC, Revenue ex-TAC by Region and Revenue ex-TAC margin are key measures used by our management and board of directors to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the elimination of TAC from revenue can provide a useful measure for period-to-period comparisons of our business and across our geographies. Accordingly, we believe that Revenue ex-TAC, Revenue ex-TAC by Region and Revenue ex-TAC margin provide useful information to investors and the market generally in understanding and evaluating our operating results in the same manner as our management and board of directors.
Adjusted EBITDA is our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity awards compensation expense, pension service costs, restructuring costs, acquisition-related costs and deferred price consideration. Adjusted EBITDA and Adjusted EBITDA margin are key measures used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short‑ and long-term operational plans. In particular, we believe that by eliminating equity awards compensation expense, pension service costs, restructuring costs, acquisition-related costs and deferred price consideration, Adjusted EBITDA and Adjusted EBITDA margin can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.
Adjusted Net Income is our net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related intangible assets, acquisition-related costs and deferred price consideration, restructuring costs and the tax impact of these adjustments. Adjusted Net Income and Adjusted Net Income per diluted share are key measures used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that by eliminating equity awards compensation expense, amortization of acquisition-related intangible assets, acquisition-related costs and deferred price consideration, restructuring costs and the tax impact of these adjustments, Adjusted Net Income and Adjusted Net Income per diluted share can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted Net Income and Adjusted Net Income per diluted share provide useful information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.
Free Cash Flow is defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment. Free Cash Flow is a key measure used by our management and board of directors to evaluate the Company’s ability to generate cash. Accordingly, we believe that Free Cash Flow permits a more complete and comprehensive analysis of our available cash flows.
Non-GAAP Operating Expenses are our consolidated operating expenses adjusted to eliminate the impact of depreciation and amortization, equity awards compensation expense, pension service costs, restructuring costs, acquisition-related costs and deferred price consideration. The Company uses Non-GAAP Operating Expenses to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short-term and long-term operational plans, and to assess and measure our financial performance and the ability of our operations to generate cash. We believe Non-GAAP Operating Expenses reflects our ongoing operating expenses in a manner that allows for meaningful period-to-period comparisons and analysis of trends in our business. As a result, we believe that Non-GAAP Operating Expenses provides useful information to investors in understanding and evaluating our core operating performance and trends in the same manner as our management and in comparing financial results across periods. In addition, Non-GAAP Operating Expenses is a key component in calculating Adjusted EBITDA, which is one of the key measures the Company uses to provide its quarterly and annual business outlook to the investment community.
Please refer to the supplemental financial tables provided in the appendix of this press release for a reconciliation of Revenue ex-TAC to revenue, Revenue ex-TAC by Region to revenue by region, Adjusted EBITDA to net income, Adjusted Net Income to net income, Free Cash Flow to cash flow from operating activities, and Non-GAAP Operating Expenses to operating expenses, in each case, the most comparable U.S. GAAP measure. Our use of non-GAAP financial measures has limitations as an analytical tool, and you should not consider such non-GAAP measures in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP.
Some of these limitations are: 1) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; and 2) other companies may report Revenue ex-TAC, Revenue ex-TAC by Region, Adjusted EBITDA, Adjusted Net Income, Free Cash Flow, Non-GAAP Operating Expenses or similarly titled measures but calculate them differently or over different regions, which reduces their usefulness as comparative measures. Because of these and other limitations, you should consider these measures alongside our U.S. GAAP financial results, including revenue and net income.
Forward-Looking Statements Disclosure
This press release contains forward-looking statements, including projected financial results for the quarter ending June 30, 2018 and the fiscal year ending December 31, 2018, our expectations regarding our market opportunity and future growth prospects and other statements that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to: failure related to our technology and our ability to respond to changes in technology, uncertainty regarding our ability to access a consistent supply of internet display advertising inventory and expand access to such inventory, investments in new business opportunities and the timing of these investments, whether the projected benefits of acquisitions materialize as expected, uncertainty regarding international growth and expansion, the impact of competition, uncertainty regarding legislative, regulatory or self-regulatory developments regarding data privacy matters and the impact of efforts by other participants in our industry to comply therewith, failure to enhance our brand cost-effectively, recent growth rates not being indicative of future growth, our ability to manage growth, potential fluctuations in operating results, our ability to grow our base of clients, and the financial impact of maximizing Revenue ex-TAC, as well as risks related to future opportunities and plans, including the uncertainty of expected future financial performance and results and those risks detailed from time-to-time under the caption “Risk Factors” and elsewhere in the Company’s SEC filings and reports, including the Company’s Annual Report on Form 10-K filed with the SEC on March 1, 2018, the Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed with the SEC on May 4, 2018, and the Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, that will be filed with the SEC, as well as future filings and reports by the Company. Except as required by law, the Company undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events, changes in expectations or otherwise.
Conference Call Information
Criteo’s earnings conference call will take place today, August 1, 2018, at 8:00 AM ET, 2:00 PM CET. The conference call will be webcast live on the Company’s website http://ir.criteo.com and will be available for replay.
Conference call details:
|
• U.S. callers: |
+1 855 209 8212 |
|
• International callers: |
+1 412 317 0788 or +33 1 76 74 05 02 |
Please ask to be joined into the “Criteo S.A.” call.
About Criteo
Criteo (NASDAQ: CRTO) is the advertising platform of choice for the open Internet, an ecosystem that favors neutrality, transparency and inclusiveness. 2,700 Criteo team members partner with close to 19,000 customers and thousands of publishers around the globe to deliver effective advertising across all channels, by applying advanced machine learning to unparalleled data sets. Criteo empowers companies of all sizes with the technology they need to better know and serve their customers. For more information, please visit www.criteo.com.
___________________________________________________
1 Growth at constant currency excludes the impact of foreign currency fluctuations and is computed by applying the 2017 average exchange rates for the relevant period to 2018 figures.
2 Revenue ex-TAC, Adjusted EBITDA, Adjusted net Income per diluted share and Free Cash Flow are not measures calculated in accordance with U.S. GAAP.
3 Same-client Revenue ex-TAC is the Revenue ex-TAC generated by clients that were live with us in a given quarter and still live with us the same quarter in the following year.
Contacts
Criteo Investor Relations
Edouard Lassalle, VP, Head of IR, e.lassalle@criteo.com
Friederike Edelmann, IR Director, f.edelmann@criteo.com
Criteo Public Relations
Emma Ferns, VP Global Communications, e.ferns@criteo.com
Financial information to follow
|
CRITEO S.A. Consolidated Statement of Financial Position (U.S. dollars in thousands, unaudited) |
||||||||
|
December 31, 2017 |
June 30, 2018 |
|||||||
|
Assets |
||||||||
|
Current assets: |
||||||||
|
Cash and cash equivalents |
$ |
414,111 |
$ |
480,285 |
||||
|
Trade receivables, net of allowances |
484,101 |
372,906 |
||||||
|
Income taxes |
8,882 |
11,921 |
||||||
|
Other taxes |
58,346 |
42,076 |
||||||
|
Other current assets |
26,327 |
26,114 |
||||||
|
Total current assets |
991,767 |
933,302 |
||||||
|
Property, plant and equipment, net |
161,738 |
146,904 |
||||||
|
Intangible assets, net |
96,223 |
87,031 |
||||||
|
Goodwill |
236,826 |
235,950 |
||||||
|
Non-current financial assets |
19,525 |
20,226 |
||||||
|
Deferred tax assets |
25,221 |
33,129 |
||||||
|
Total non-current assets |
539,533 |
523,240 |
||||||
|
Total assets |
$ |
1,531,300 |
$ |
1,456,542 |
||||
|
Liabilities and shareholders’ equity |
||||||||
|
Current liabilities: |
||||||||
|
Trade payables |
$ |
417,032 |
$ |
321,295 |
||||
|
Contingencies |
1,798 |
1,811 |
||||||
|
Income taxes |
9,997 |
9,346 |
||||||
|
Financial liabilities – current portion |
1,499 |
1,055 |
||||||
|
Other taxes |
58,783 |
46,947 |
||||||
|
Employee – related payables |
66,219 |
65,832 |
||||||
|
Other current liabilities |
65,677 |
30,803 |
||||||
|
Total current liabilities |
621,005 |
477,089 |
||||||
|
Deferred tax liabilities |
2,497 |
3,251 |
||||||
|
Retirement benefit obligation |
5,149 |
5,472 |
||||||
|
Financial liabilities – non-current portion |
2,158 |
1,758 |
||||||
|
Other non-current liabilities |
2,793 |
4,104 |
||||||
|
Total non-current liabilities |
12,597 |
14,585 |
||||||
|
Total liabilities |
633,602 |
491,674 |
||||||
|
Commitments and contingencies |
||||||||
|
Shareholders’ equity: |
||||||||
|
Common shares, €0.025 per value, 66,085,097 and 66,861,045 shares authorized, issued and outstanding at December 31, 2017 and June 30, 2018, respectively. |
2,152 |
2,177 |
||||||
|
Additional paid-in capital |
591,404 |
630,772 |
||||||
|
Accumulated other comprehensive income (loss) |
(12,241) |
(20,722) |
||||||
|
Retained earnings |
300,210 |
333,725 |
||||||
|
Equity – attributable to shareholders of Criteo S.A. |
881,525 |
945,952 |
||||||
|
Non-controlling interests |
16,173 |
18,916 |
||||||
|
Total equity |
897,698 |
964,868 |
||||||
|
Total equity and liabilities |
$ |
1,531,300 |
$ |
1,456,542 |
||||
|
CRITEO S.A. Consolidated Statement of Income (U.S. dollars in thousands, except share and per share data, unaudited) |
||||||||||||||||||||||
|
Three Months Ended |
Six Months Ended |
|||||||||||||||||||||
|
June 30, |
June 30, |
|||||||||||||||||||||
|
2017 |
2018 |
YoY |
2017 |
2018 |
YoY Change |
|||||||||||||||||
|
Revenue |
$ |
542,022 |
$ |
537,185 |
(1) |
% |
$ |
1,058,688 |
$ |
1,101,349 |
4 |
% |
||||||||||
|
Cost of revenue |
||||||||||||||||||||||
|
Traffic acquisition cost |
(322,200) |
(306,963) |
(5) |
% |
(628,893) |
(630,709) |
0.3 |
% |
||||||||||||||
|
Other cost of revenue |
(32,808) |
(29,957) |
(9) |
% |
(59,963) |
(60,016) |
0.1 |
% |
||||||||||||||
|
Gross profit |
187,014 |
200,265 |
7 |
% |
369,832 |
410,624 |
11 |
% |
||||||||||||||
|
Operating expenses: |
||||||||||||||||||||||
|
Research and development expenses |
(43,611) |
(47,544) |
9 |
% |
(83,132) |
(92,862) |
12 |
% |
||||||||||||||
|
Sales and operations expenses |
(97,900) |
(92,726) |
(5) |
% |
(188,631) |
(188,375) |
(0.1) |
% |
||||||||||||||
|
General and administrative expenses |
(32,239) |
(35,644) |
11 |
% |
(63,754) |
(70,235) |
10 |
% |
||||||||||||||
|
Total Operating expenses |
(173,750) |
(175,914) |
1 |
% |
(335,517) |
(351,472) |
5 |
% |
||||||||||||||
|
Income from operations |
13,264 |
24,351 |
84 |
% |
34,315 |
59,152 |
72 |
% |
||||||||||||||
|
Financial income (expense), net |
(2,094) |
(1,006) |
(52) |
% |
(4,427) |
(2,331) |
(47) |
% |
||||||||||||||
|
Income before taxes |
11,170 |
23,345 |
109 |
% |
29,888 |
56,821 |
90 |
% |
||||||||||||||
|
Provision for income taxes |
(3,665) |
(8,638) |
136 |
% |
(7,866) |
(21,024) |
167 |
% |
||||||||||||||
|
Net Income |
$ |
7,505 |
$ |
14,707 |
96 |
% |
$ |
22,022 |
$ |
35,797 |
63 |
% |
||||||||||
|
Net income available to shareholders of Criteo S.A. |
$ |
5,970 |
$ |
13,726 |
$ |
18,411 |
$ |
33,535 |
||||||||||||||
|
Net income available to non-controlling interests |
$ |
1,535 |
$ |
981 |
$ |
3,611 |
$ |
2,262 |
||||||||||||||
|
Weighted average shares outstanding used in computing per share amounts: |
||||||||||||||||||||||
|
Basic |
65,027,985 |
66,347,599 |
64,611,237 |
66,254,476 |
||||||||||||||||||
|
Diluted |
68,131,274 |
67,488,311 |
67,709,789 |
67,479,513 |
||||||||||||||||||
|
Net income allocated to shareholders per share: |
||||||||||||||||||||||
|
Basic |
$ |
0.09 |
$ |
0.21 |
$ |
0.28 |
$ |
0.51 |
||||||||||||||
|
Diluted |
$ |
0.09 |
$ |
0.20 |
$ |
0.27 |
$ |
0.50 |
||||||||||||||
|
CRITEO S.A. Consolidated Statement of Cash Flows (U.S. dollars in thousands, unaudited) |
||||||||||||||||||||||
|
Three Months Ended |
Six Months Ended |
|||||||||||||||||||||
|
June 30, |
YoY Change |
June 30, |
YoY Change |
|||||||||||||||||||
|
2017 |
2018 |
2017 |
2018 |
|||||||||||||||||||
|
Net income |
$ |
7,505 |
$ |
14,707 |
96 |
% |
$ |
22,022 |
$ |
35,797 |
63 |
% |
||||||||||
|
Non-cash and non-operating items |
42,974 |
54,021 |
26 |
% |
84,448 |
107,987 |
28 |
% |
||||||||||||||
|
– Amortization and provisions |
24,376 |
25,099 |
3 |
% |
46,692 |
51,149 |
10 |
% |
||||||||||||||
|
– Equity awards compensation expense (1) |
14,918 |
20,242 |
36 |
% |
29,858 |
39,071 |
31 |
% |
||||||||||||||
|
– Interest accrued and non-cash financial income and expense |
15 |
21 |
40 |
% |
32 |
44 |
38 |
% |
||||||||||||||
|
– Change in deferred taxes |
(5,536) |
(4,389) |
(21) |
% |
(12,405) |
(7,535) |
(39) |
% |
||||||||||||||
|
– Income tax for the period |
9,201 |
13,028 |
42 |
% |
20,271 |
28,560 |
41 |
% |
||||||||||||||
|
– Other (2) |
— |
20 |
– |
— |
(3,302) |
– |
||||||||||||||||
|
Changes in working capital related to operating activities |
25,860 |
(10,043) |
(139) |
% |
25,790 |
13,644 |
(47) |
% |
||||||||||||||
|
– (Increase)/decrease in trade receivables |
(23,358) |
10,154 |
(143) |
% |
36,211 |
101,446 |
180 |
% |
||||||||||||||
|
– Increase/(decrease) in trade payables |
48,776 |
(26,745) |
(155) |
% |
(26,254) |
(89,690) |
242 |
% |
||||||||||||||
|
– (Increase)/decrease in other current assets |
(3,493) |
5,821 |
(267) |
% |
2,580 |
13,779 |
434 |
% |
||||||||||||||
|
– Increase/(decrease) in other current liabilities (2) |
3,935 |
727 |
(82) |
% |
13,253 |
(11,891) |
(190) |
% |
||||||||||||||
|
Income taxes paid |
(15,848) |
(18,344) |
16 |
% |
(27,531) |
(32,560) |
18 |
% |
||||||||||||||
|
CASH FROM OPERATING ACTIVITIES |
60,491 |
40,341 |
(33) |
% |
104,729 |
124,868 |
19 |
% |
||||||||||||||
|
Acquisition of intangible assets, property, plant and equipment |
(30,008) |
(18,880) |
(37) |
% |
(53,275) |
(26,293) |
(51) |
% |
||||||||||||||
|
Change in accounts payable related to intangible assets, property, plant and equipment |
2,953 |
1,033 |
(65) |
% |
(1,986) |
(24,121) |
– |
|||||||||||||||
|
Payments for (Disposal of) business, net of cash acquired (disposed) |
1,089 |
— |
(100) |
% |
1,052 |
(10,811) |
– |
|||||||||||||||
|
Change in other non-current financial assets |
1,668 |
154 |
(91) |
% |
1,274 |
42 |
(97) |
% |
||||||||||||||
|
CASH USED FOR INVESTING ACTIVITIES |
(24,298) |
(17,693) |
(27) |
% |
(52,935) |
(61,183) |
16 |
% |
||||||||||||||
|
Issuance of long-term borrowings |
1,454 |
— |
(100) |
% |
1,454 |
— |
(100) |
% |
||||||||||||||
|
Repayment of borrowings (3) |
(77,168) |
(235) |
(100) |
% |
(79,221) |
(473) |
(99) |
% |
||||||||||||||
|
Proceeds from capital increase |
11,517 |
396 |
(97) |
% |
24,454 |
562 |
(98) |
% |
||||||||||||||
|
Change in other financial liabilities (2) |
145 |
(35) |
(124) |
% |
264 |
16,810 |
– |
|||||||||||||||
|
CASH (USED FOR) FROM FINANCING ACTIVITIES |
(64,052) |
126 |
(100) |
% |
(53,049) |
16,899 |
(132) |
% |
||||||||||||||
|
CHANGE IN NET CASH AND CASH EQUIVALENTS |
(27,859) |
22,774 |
(182) |
% |
(1,255) |
80,584 |
– |
|||||||||||||||
|
Net cash and cash equivalents at beginning of period |
303,813 |
483,874 |
59 |
% |
270,317 |
414,111 |
53 |
% |
||||||||||||||
|
Effect of exchange rates changes on cash and cash equivalents (2) |
32,231 |
(26,363) |
(182) |
% |
39,123 |
(14,410) |
(137) |
% |
||||||||||||||
|
Net cash and cash equivalents at end of period |
$ |
308,185 |
$ |
480,285 |
56 |
% |
$ |
308,185 |
$ |
480,285 |
56 |
% |
||||||||||
|
(1) Of which $14.7 million and $19.8 million of equity awards compensation expense consisted of share-based compensation expense according to ASC 718 Compensation – stock compensation for the quarter ended June 30, 2017 and 2018, respectively, and $29.3 million and $38.2 million for the six month period ended June 30, 2017 and 2018, respectively. |
|
(2) During the quarter ended June 30, 2018 and the six months ended June 30, 2018, respectively, the Company reported the cash impact of the settlement of hedging derivatives related to financing activities in cash from (used for) financing activities in the unaudited consolidated statements of cash flows. |
|
(3) Interest paid for the quarter ended June 30, 2017 and 2018, amounted to $0.8 million and $0.4 million respectively and for the six months ended June 30, 2017 and 2018, amounted to $1.5 million and $0.8 million respectively. |
|
CRITEO S.A. Reconciliation of Cash from Operating Activities to Free Cash Flow (U.S. dollars in thousands, unaudited) |
||||||||||||||||||||||
|
Three Months Ended |
Six Months Ended |
|||||||||||||||||||||
|
June 30, |
YoY Change |
June 30, |
YoY Change |
|||||||||||||||||||
|
2017 |
2018 |
2017 |
2018 |
|||||||||||||||||||
|
CASH FROM OPERATING ACTIVITIES |
$ |
60,491 |
$ |
40,341 |
(33) |
% |
$ |
104,729 |
$ |
124,868 |
19 |
% |
||||||||||
|
Acquisition of intangible assets, property, plant and equipment |
(30,008) |
(18,880) |
(37) |
% |
(53,275) |
(26,293) |
(51) |
% |
||||||||||||||
|
Change in accounts payable related to intangible assets, property, plant and equipment |
2,953 |
1,033 |
(65) |
% |
(1,986) |
(24,121) |
– |
|||||||||||||||
|
FREE CASH FLOW (1) |
$ |
33,436 |
$ |
22,494 |
(33) |
% |
$ |
49,468 |
$ |
74,454 |
51 |
% |
||||||||||
|
(1) Free Cash Flow is defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and change in accounts payable related to intangible assets, property, plant and equipment. |
|
CRITEO S.A. Reconciliation of Revenue ex-TAC by Region to Revenue by Region (U.S. dollars in thousands, unaudited) |
|||||||||||||||||||||||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||||||||||||||||||
|
June 30, |
June 30, |
||||||||||||||||||||||||||||
|
Region |
2017 |
2018 |
YoY |
YoY |
2017 |
2018 |
YoY |
YoY |
|||||||||||||||||||||
|
Revenue |
|||||||||||||||||||||||||||||
|
Americas |
$ |
229,392 |
$ |
212,781 |
(7) |
% |
(7) |
% |
$ |
437,405 |
$ |
425,476 |
(3) |
% |
(2) |
% |
|||||||||||||
|
EMEA |
191,682 |
201,080 |
5 |
% |
(1) |
% |
380,774 |
423,691 |
11 |
% |
2 |
% |
|||||||||||||||||
|
Asia-Pacific |
120,948 |
123,324 |
2 |
% |
0.2 |
% |
240,509 |
252,182 |
5 |
% |
2 |
% |
|||||||||||||||||
|
Total |
542,022 |
537,185 |
(1) |
% |
(3) |
% |
1,058,688 |
1,101,349 |
4 |
% |
— |
% |
|||||||||||||||||
|
Traffic acquisition costs |
|||||||||||||||||||||||||||||
|
Americas |
(145,289) |
(125,502) |
(14) |
% |
(13) |
% |
(274,156) |
(257,023) |
(6) |
% |
(6) |
% |
|||||||||||||||||
|
EMEA |
(106,605) |
(112,577) |
6 |
% |
(0.1) |
% |
(214,189) |
(232,470) |
9 |
% |
(1) |
% |
|||||||||||||||||
|
Asia-Pacific |
(70,306) |
(68,884) |
(2) |
% |
(4) |
% |
(140,548) |
(141,216) |
0.5 |
% |
(3) |
% |
|||||||||||||||||
|
Total |
(322,200) |
(306,963) |
(5) |
% |
(7) |
% |
(628,893) |
(630,709) |
0.3 |
% |
(3) |
% |
|||||||||||||||||
|
Revenue ex-TAC (1) |
|||||||||||||||||||||||||||||
|
Americas |
84,103 |
87,279 |
4 |
% |
4 |
% |
163,249 |
168,453 |
3 |
% |
4 |
% |
|||||||||||||||||
|
EMEA |
85,077 |
88,503 |
4 |
% |
(1) |
% |
166,585 |
191,221 |
15 |
% |
5 |
% |
|||||||||||||||||
|
Asia-Pacific |
50,642 |
54,440 |
7 |
% |
6 |
% |
99,961 |
110,966 |
11 |
% |
8 |
% |
|||||||||||||||||
|
Total |
$ |
219,822 |
$ |
230,222 |
5 |
% |
2 |
% |
$ |
429,795 |
$ |
470,640 |
10 |
% |
5 |
% |
|||||||||||||
|
(1) We define Revenue ex-TAC as our revenue excluding traffic acquisition costs generated over the applicable measurement period. Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region are not measures calculated in accordance with U.S. GAAP. We have included Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region because they are key measures used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the elimination of TAC from revenue and review of these measures by region can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) other companies, including companies in our industry which have similar business arrangements, may address the impact of TAC differently; (b) other companies may report Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region or similarly titled measures but define the regions differently, which reduces their effectiveness as a comparative measure; and (c) other companies may report Revenue ex-TAC or similarly titled measures but calculate them differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region alongside our other U.S. GAAP financial results, including revenue. The above table provides a reconciliation of Revenue ex-TAC to revenue and Revenue ex-TAC by Region to revenue by region. |
|
CRITEO S.A. Reconciliation of Adjusted EBITDA to Net Income (U.S. dollars in thousands, unaudited) |
||||||||||||||||||||||
|
Three Months Ended |
Six Months Ended |
|||||||||||||||||||||
|
June 30, |
YoY Change |
June 30, |
YoY Change |
|||||||||||||||||||
|
2017 |
2018 |
2017 |
2018 |
|||||||||||||||||||
|
Net income |
$ |
7,505 |
$ |
14,707 |
96 |
% |
$ |
22,022 |
$ |
35,797 |
63 |
% |
||||||||||
|
Adjustments: |
||||||||||||||||||||||
|
Financial (income) expense, net |
2,094 |
1,006 |
(52) |
% |
4,427 |
2,331 |
(47) |
% |
||||||||||||||
|
Provision for income taxes |
3,665 |
8,638 |
136 |
% |
7,866 |
21,024 |
167 |
% |
||||||||||||||
|
Equity awards compensation expense |
14,918 |
20,245 |
36 |
% |
29,858 |
39,548 |
32 |
% |
||||||||||||||
|
Research and development |
4,461 |
6,771 |
52 |
% |
8,377 |
11,326 |
35 |
% |
||||||||||||||
|
Sales and operations |
6,401 |
8,668 |
35 |
% |
13,111 |
16,499 |
26 |
% |
||||||||||||||
|
General and administrative |
4,056 |
4,806 |
18 |
% |
8,370 |
11,723 |
40 |
% |
||||||||||||||
|
Pension service costs |
299 |
419 |
40 |
% |
589 |
853 |
45 |
% |
||||||||||||||
|
Research and development |
151 |
212 |
40 |
% |
297 |
432 |
45 |
% |
||||||||||||||
|
Sales and operations |
60 |
75 |
25 |
% |
119 |
154 |
29 |
% |
||||||||||||||
|
General and administrative |
88 |
132 |
50 |
% |
173 |
267 |
54 |
% |
||||||||||||||
|
Depreciation and amortization expense |
22,306 |
23,560 |
6 |
% |
42,473 |
47,206 |
11 |
% |
||||||||||||||
|
Cost of revenue |
13,003 |
15,050 |
16 |
% |
24,094 |
30,299 |
26 |
% |
||||||||||||||
|
Research and development |
3,092 |
2,245 |
(27) |
% |
6,036 |
4,466 |
(26) |
% |
||||||||||||||
|
Sales and operations |
4,925 |
4,518 |
(8) |
% |
9,886 |
8,972 |
(9) |
% |
||||||||||||||
|
General and administrative |
1,286 |
1,747 |
36 |
% |
2,457 |
3,469 |
41 |
% |
||||||||||||||
|
Acquisition-related costs |
— |
— |
– |
6 |
— |
(100) |
% |
|||||||||||||||
|
General and administrative |
— |
— |
– |
6 |
— |
(100) |
% |
|||||||||||||||
|
Restructuring |
3,299 |
199 |
(94) |
% |
3,299 |
(53) |
(102) |
% |
||||||||||||||
|
Cost of revenue |
2,497 |
— |
(100) |
% |
2,497 |
— |
(100) |
% |
||||||||||||||
|
Research and development |
— |
16 |
– |
— |
(332) |
– |
||||||||||||||||
|
Sales and operations |
690 |
183 |
(73) |
% |
690 |
290 |
(58) |
% |
||||||||||||||
|
General and administrative |
112 |
— |
(100) |
% |
112 |
(11) |
(110) |
% |
||||||||||||||
|
Total net adjustments |
46,581 |
54,067 |
16 |
% |
88,518 |
110,909 |
25 |
% |
||||||||||||||
|
Adjusted EBITDA(1) |
$ |
54,086 |
$ |
68,774 |
27 |
% |
$ |
110,540 |
$ |
146,706 |
33 |
% |
||||||||||
|
(1) We define Adjusted EBITDA as our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity awards compensation expense, pension service costs, restructuring costs, acquisition-related costs and deferred price consideration. Adjusted EBITDA is not a measure calculated in accordance with U.S. GAAP. We have included Adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short-term and long-term operational plans. In particular, we believe that the elimination of equity awards compensation expense, pension service costs, restructuring costs, acquisition-related costs and deferred price consideration in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; (b) Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (c) Adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation; (d) Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and (e) other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Adjusted EBITDA alongside our U.S. GAAP financial results, including net income. |
|
CRITEO S.A. Reconciliation from Non-GAAP Operating Expenses to Operating Expenses under GAAP (U.S. dollars in thousands, unaudited) |
||||||||||||||||||||||
|
Three Months Ended |
Six Months Ended |
|||||||||||||||||||||
|
June 30, |
YoY Change |
June 30, |
YoY Change |
|||||||||||||||||||
|
2017 |
2018 |
2017 |
2018 |
|||||||||||||||||||
|
Research and Development expenses |
$ |
(43,611) |
$ |
(47,544) |
9 |
% |
$ |
(83,132) |
$ |
(92,862) |
12 |
% |
||||||||||
|
Equity awards compensation expense |
4,461 |
6,771 |
52 |
% |
8,377 |
11,326 |
35 |
% |
||||||||||||||
|
Depreciation and Amortization expense |
3,092 |
2,245 |
(27) |
% |
6,036 |
4,466 |
(26) |
% |
||||||||||||||
|
Pension service costs |
151 |
212 |
40 |
% |
297 |
432 |
45 |
% |
||||||||||||||
|
Restructuring |
— |
16 |
– |
— |
(332) |
– |
||||||||||||||||
|
Non GAAP – Research and Development expenses |
(35,907) |
(38,300) |
7 |
% |
(68,422) |
(76,970) |
12 |
% |
||||||||||||||
|
Sales and Operations expenses |
(97,900) |
(92,726) |
(5) |
% |
(188,631) |
(188,375) |
— |
% |
||||||||||||||
|
Equity awards compensation expense |
6,401 |
8,668 |
35 |
% |
13,111 |
16,499 |
26 |
% |
||||||||||||||
|
Depreciation and Amortization expense |
4,925 |
4,518 |
(8) |
% |
9,886 |
8,972 |
(9) |
% |
||||||||||||||
|
Pension service costs |
60 |
75 |
25 |
% |
119 |
154 |
29 |
% |
||||||||||||||
|
Restructuring |
690 |
183 |
(73) |
% |
690 |
290 |
(58) |
% |
||||||||||||||
|
Non GAAP – Sales and Operations expenses |
(85,824) |
(79,282) |
(8) |
% |
(164,825) |
(162,460) |
(1) |
% |
||||||||||||||
|
General and Administrative expenses |
(32,239) |
(35,644) |
11 |
% |
(63,754) |
(70,235) |
10 |
% |
||||||||||||||
|
Equity awards compensation expense |
4,056 |
4,806 |
18 |
% |
8,370 |
11,723 |
40 |
% |
||||||||||||||
|
Depreciation and Amortization expense |
1,286 |
1,747 |
36 |
% |
2,457 |
3,469 |
41 |
% |
||||||||||||||
|
Pension service costs |
88 |
132 |
50 |
% |
173 |
267 |
54 |
% |
||||||||||||||
|
Acquisition related costs |
— |
— |
– |
6 |
— |
(100) |
% |
|||||||||||||||
|
Restructuring |
112 |
— |
(100) |
% |
112 |
(11) |
(110) |
% |
||||||||||||||
|
Non GAAP – General and Operations expenses |
(26,697) |
(28,959) |
8 |
% |
(52,636) |
(54,787) |
4 |
% |
||||||||||||||
|
Total Operating expenses |
(173,750) |
(175,914) |
1 |
% |
(335,517) |
(351,472) |
5 |
% |
||||||||||||||
|
Equity awards compensation expense |
14,918 |
20,245 |
36 |
% |
29,858 |
39,548 |
32 |
% |
||||||||||||||
|
Depreciation and Amortization expense |
9,303 |
8,510 |
(9) |
% |
18,379 |
16,907 |
(8) |
% |
||||||||||||||
|
Pension service costs |
299 |
419 |
40 |
% |
589 |
853 |
45 |
% |
||||||||||||||
|
Acquisition-related costs |
— |
— |
– |
6 |
— |
(100) |
% |
|||||||||||||||
|
Restructuring |
802 |
199 |
(75) |
% |
802 |
(53) |
(107) |
% |
||||||||||||||
|
Total Non GAAP Operating expenses (1) |
$ |
(148,428) |
$ |
(146,541) |
(1) |
% |
$ |
(285,883) |
$ |
(294,217) |
3 |
% |
||||||||||
|
(1) We define Non-GAAP Operating Expenses as our consolidated operating expenses adjusted to eliminate the impact of depreciation and amortization, equity awards compensation expense, pension service costs, restructuring costs, acquisition-related costs and deferred price consideration. The Company uses Non-GAAP Operating Expenses to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short-term and long-term operational plans, and to assess and measure our financial performance and the ability of our operations to generate cash. We believe Non-GAAP Operating Expenses reflects our ongoing operating expenses in a manner that allows for meaningful period-to-period comparisons and analysis of trends in our business. As a result, we believe that Non-GAAP Operating Expenses provides useful information to investors in understanding and evaluating our core operating performance and trends in the same manner as our management and in comparing financial results across periods. In addition, Non-GAAP Operating Expenses is a key component in calculating Adjusted EBITDA, which is one of the key measures we use to provide our quarterly and annual business outlook to the investment community. |
|
CRITEO S.A. Detailed Information on Selected Items (U.S. dollars in thousands, unaudited) |
||||||||||||||||||||||
|
Three Months Ended |
Six Months Ended |
|||||||||||||||||||||
|
June 30, |
YoY Change |
June 30, |
YoY Change |
|||||||||||||||||||
|
2017 |
2018 |
2017 |
2018 |
|||||||||||||||||||
|
Equity awards compensation expense |
||||||||||||||||||||||
|
Research and development |
$ |
4,461 |
$ |
6,771 |
52 |
% |
$ |
8,377 |
$ |
11,326 |
35 |
% |
||||||||||
|
Sales and operations |
6,401 |
8,668 |
35 |
% |
13,111 |
16,499 |
26 |
% |
||||||||||||||
|
General and administrative |
4,056 |
4,806 |
18 |
% |
8,370 |
11,723 |
40 |
% |
||||||||||||||
|
Total equity awards compensation expense |
14,918 |
20,245 |
36 |
% |
29,858 |
39,548 |
32 |
% |
||||||||||||||
|
Pension service costs |
||||||||||||||||||||||
|
Research and development |
151 |
212 |
40 |
% |
297 |
432 |
45 |
% |
||||||||||||||
|
Sales and operations |
60 |
75 |
25 |
% |
119 |
154 |
29 |
% |
||||||||||||||
|
General and administrative |
88 |
132 |
50 |
% |
173 |
267 |
54 |
% |
||||||||||||||
|
Total pension service costs |
299 |
419 |
40 |
% |
589 |
853 |
45 |
% |
||||||||||||||
|
Depreciation and amortization expense |
||||||||||||||||||||||
|
Cost of revenue |
13,003 |
15,050 |
16 |
% |
24,094 |
30,299 |
26 |
% |
||||||||||||||
|
Research and development |
3,092 |
2,245 |
(27) |
% |
6,036 |
4,466 |
(26) |
% |
||||||||||||||
|
Sales and operations |
4,925 |
4,518 |
(8) |
% |
9,886 |
8,972 |
(9) |
% |
||||||||||||||
|
General and administrative |
1,286 |
1,747 |
36 |
% |
2,457 |
3,469 |
41 |
% |
||||||||||||||
|
Total depreciation and amortization expense |
22,306 |
23,560 |
6 |
% |
42,473 |
47,206 |
11 |
% |
||||||||||||||
|
Acquisition-related costs |
||||||||||||||||||||||
|
General and administrative |
— |
— |
– |
6 |
— |
(100) |
% |
|||||||||||||||
|
Total acquisition-related costs |
— |
— |
– |
6 |
— |
(100) |
% |
|||||||||||||||
|
Restructuring |
||||||||||||||||||||||
|
Cost of revenue |
2,497 |
— |
(100) |
% |
2,497 |
— |
(100) |
% |
||||||||||||||
|
Research and development |
— |
16 |
– |
— |
(332) |
– |
||||||||||||||||
|
Sales and operations |
690 |
183 |
(73) |
% |
690 |
290 |
(58) |
% |
||||||||||||||
|
General and administrative |
112 |
— |
(100) |
% |
112 |
(11) |
(110) |
% |
||||||||||||||
|
Total restructuring |
$ |
3,299 |
$ |
199 |
(94) |
% |
$ |
3,299 |
$ |
(53) |
(102) |
% |
||||||||||
|
CRITEO S.A. Reconciliation of Adjusted Net Income to Net Income (U.S. dollars in thousands except share and per share data, unaudited) |
||||||||||||||||||||||
|
Three Months Ended |
Six Months Ended |
|||||||||||||||||||||
|
June 30, |
YoY Change |
June 30, |
YoY Change |
|||||||||||||||||||
|
2017 |
2018 |
2017 |
2018 |
|||||||||||||||||||
|
Net income |
$ |
7,505 |
$ |
14,707 |
96 |
% |
$ |
22,022 |
$ |
35,797 |
63 |
% |
||||||||||
|
Adjustments: |
||||||||||||||||||||||
|
Equity awards compensation expense |
14,918 |
20,245 |
36 |
% |
29,858 |
39,548 |
32 |
% |
||||||||||||||
|
Amortization of acquisition-related intangible assets |
4,777 |
3,448 |
(28) |
% |
9,451 |
6,905 |
(27) |
% |
||||||||||||||
|
Acquisition-related costs |
— |
— |
– |
6 |
— |
(100) |
% |
|||||||||||||||
|
Restructuring costs |
3,299 |
199 |
(94) |
% |
3,299 |
(53) |
(102) |
% |
||||||||||||||
|
Tax impact of the above adjustments |
(4,255) |
(3,117) |
(27) |
% |
(7,571) |
(6,196) |
(18) |
% |
||||||||||||||
|
Total net adjustments |
18,739 |
20,775 |
11 |
% |
35,043 |
40,204 |
15 |
% |
||||||||||||||
|
Adjusted net income(1) |
$ |
26,244 |
$ |
35,482 |
35 |
% |
$ |
57,065 |
$ |
76,001 |
33 |
% |
||||||||||
|
Weighted average shares outstanding |
||||||||||||||||||||||
|
– Basic |
65,027,985 |
66,347,599 |
64,611,237 |
66,254,476 |
||||||||||||||||||
|
– Diluted |
68,131,274 |
67,488,311 |
67,709,789 |
67,479,513 |
||||||||||||||||||
|
Adjusted net income per share |
||||||||||||||||||||||
|
– Basic |
$ |
0.40 |
$ |
0.53 |
33 |
% |
$ |
0.88 |
$ |
1.15 |
31 |
% |
||||||||||
|
– Diluted |
$ |
0.39 |
$ |
0.53 |
36 |
% |
$ |
0.84 |
$ |
1.13 |
35 |
% |
||||||||||
|
(1) We define Adjusted Net Income as our net income adjusted to eliminate the impact of equity awards compensation expense, amortization of acquisition-related intangible assets, restructuring costs, acquisition-related costs and deferred price consideration and the tax impact of the foregoing adjustments. Adjusted Net Income is not a measure calculated in accordance with U.S. GAAP. We have included Adjusted Net Income because it is a key measure used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the elimination of equity awards compensation expense, amortization of acquisition-related intangible assets, acquisition-related costs and deferred price consideration, restructuring costs and the tax impact of the foregoing adjustments in calculating Adjusted Net Income can provide a useful measure for period-to-period comparisons of our business. Accordingly, we believe that Adjusted Net Income provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Our use of Adjusted Net Income has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (a) Adjusted Net Income does not reflect the potentially dilutive impact of equity-based compensation or the impact of certain acquisition related costs; and (b) other companies, including companies in our industry, may calculate Adjusted Net Income or similarly titled measures differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Adjusted Net Income alongside our other U.S. GAAP-based financial results, including net income. |
|
CRITEO S.A. Constant Currency Reconciliation (U.S. dollars in thousands, unaudited) |
||||||||||||||||||||||
|
Three Months Ended |
Six Months Ended |
|||||||||||||||||||||
|
June 30, |
June 30, |
|||||||||||||||||||||
|
2017 |
2018 |
YoY |
2017 |
2018 |
YoY |
|||||||||||||||||
|
Revenue as reported |
$ |
542,022 |
$ |
537,185 |
(1) |
% |
$ |
1,058,688 |
$ |
1,101,349 |
4 |
% |
||||||||||
|
Conversion impact U.S. dollar/other currencies |
(11,393) |
(42,480) |
||||||||||||||||||||
|
Revenue at constant currency(1) |
542,022 |
525,792 |
(3) |
% |
1,058,688 |
1,058,869 |
— |
% |
||||||||||||||
|
Traffic acquisition costs as reported |
(322,200) |
(306,963) |
(5) |
% |
(628,893) |
(630,709) |
0.3 |
% |
||||||||||||||
|
Conversion impact U.S. dollar/other currencies |
6,487 |
23,356 |
||||||||||||||||||||
|
Traffic Acquisition Costs at constant currency(1) |
(322,200) |
(300,476) |
(7) |
% |
(628,893) |
(607,353) |
(3) |
% |
||||||||||||||
|
Revenue ex-TAC as reported(2) |
219,822 |
230,222 |
5 |
% |
429,795 |
470,640 |
10 |
% |
||||||||||||||
|
Conversion impact U.S. dollar/other currencies |
(4,906) |
(19,124) |
||||||||||||||||||||
|
Revenue ex-TAC at constant currency(2) |
219,822 |
225,316 |
2 |
% |
429,795 |
451,516 |
5 |
% |
||||||||||||||
|
Revenue ex-TAC(2)/Revenue as reported |
41 |
% |
43 |
% |
41 |
% |
43 |
% |
||||||||||||||
|
Other cost of revenue as reported |
(32,808) |
(29,957) |
(9) |
% |
(59,963) |
(60,016) |
0.1 |
% |
||||||||||||||
|
Conversion impact U.S. dollar/other currencies |
(73) |
603 |
||||||||||||||||||||
|
Other cost of revenue at constant currency(1) |
(32,808) |
(30,030) |
(8) |
% |
(59,963) |
(59,413) |
(1) |
% |
||||||||||||||
|
Adjusted EBITDA(3) |
54,086 |
68,774 |
27 |
% |
110,540 |
146,706 |
33 |
% |
||||||||||||||
|
Conversion impact U.S. dollar/other currencies |
(3,786) |
(13,099) |
||||||||||||||||||||
|
Adjusted EBITDA(3) at constant currency(1) |
$ |
54,086 |
$ |
64,988 |
20 |
% |
$ |
110,540 |
$ |
133,607 |
21 |
% |
||||||||||
|
Adjusted EBITDA(3)/Revenue ex-TAC(2) |
25 |
% |
30 |
% |
26 |
% |
31 |
% |
||||||||||||||
|
Adjusted EBITDA(3) at constant currency(1)/Revenue ex-TAC(2) at constant currency(1) |
25 |
% |
29 |
% |
26 |
% |
30 |
% |
||||||||||||||
|
(1) Information herein with respect to results presented on a constant currency basis is computed by applying prior period average exchange rates to current period results. We have included results on a constant currency basis because it is a key measure used by our management and Board of directors to evaluate operating performance. Management reviews and analyzes business results excluding the effect of foreign currency translation because they believe this better represents our underlying business trends. The table above reconciles the actual results presented in this section with the results presented on a constant currency basis. |
|
(2) Revenue ex-TAC is not a measure calculated in accordance with U.S. GAAP. See the table entitled “Reconciliation of Revenue ex-TAC by Region to Revenue by Region” for a reconciliation of Revenue ex-TAC to revenue. |
|
(3) Adjusted EBITDA is not a measure calculated in accordance with U.S. GAAP. See the table entitled “Reconciliation of Adjusted EBITDA to Net Income” for a reconciliation of Adjusted EBITDA to net income. |
|
CRITEO S.A. Information on Share Count (unaudited) |
||||||
|
Six Months Ended |
||||||
|
June 30, |
||||||
|
2017 |
2018 |
|||||
|
Shares outstanding as at January 1, |
63,978,204 |
66,085,097 |
||||
|
Weighted average number of shares issued during the period |
633,033 |
169,379 |
||||
|
Basic number of shares – Basic EPS basis |
64,611,237 |
66,254,476 |
||||
|
Dilutive effect of share options, warrants, employee warrants – Treasury method |
3,098,552 |
1,225,037 |
||||
|
Diluted number of shares – Diluted EPS basis |
67,709,789 |
67,479,513 |
||||
|
Shares outstanding as of June 30, |
65,291,977 |
66,861,045 |
||||
|
Total dilutive effect of share options, warrants, employee warrants |
8,487,128 |
8,477,469 |
||||
|
Fully diluted shares as of June 30, |
73,779,105 |
75,338,514 |
||||
|
CRITEO S.A. Supplemental Financial Information and Operating Metrics (U.S. dollars in thousands except where stated, unaudited) |
|||||||||||
|
Q3 |
Q4 |
Q1 |
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
YoY |
QoQ |
||
|
Clients |
12,882 |
14,468 |
15,423 |
16,370 |
17,299 |
18,118 |
18,528 |
18,936 |
16% |
2% |
|
|
Revenue |
423,867 |
566,825 |
516,667 |
542,022 |
563,973 |
674,031 |
564,164 |
537,185 |
(1)% |
(5)% |
|
|
Americas |
160,739 |
266,438 |
208,013 |
229,392 |
228,326 |
324,696 |
212,695 |
212,781 |
(7)% |
—% |
|
|
EMEA |
157,921 |
189,298 |
189,092 |
191,682 |
207,168 |
221,019 |
222,611 |
201,080 |
5% |
(10)% |
|
|
APAC |
105,207 |
111,089 |
119,562 |
120,948 |
128,479 |
128,316 |
128,858 |
123,324 |
2% |
(4)% |
|
|
TAC |
(247,310) |
(341,877) |
(306,693) |
(322,200) |
(329,576) |
(397,087) |
(323,746) |
(306,963) |
(5)% |
(5)% |
|
|
Americas |
(97,239) |
(167,046) |
(128,867) |
(145,289) |
(141,869) |
(203,368) |
(131,521) |
(125,502) |
(14)% |
(5)% |
|
|
EMEA |
(87,092) |
(108,567) |
(107,583) |
(106,605) |
(115,446) |
(120,662) |
(119,893) |
(112,577) |
6% |
(6)% |
|
|
APAC |
(62,979) |
(66,264) |
(70,243) |
(70,306) |
(72,261) |
(73,057) |
(72,332) |
(68,884) |
(2)% |
(5)% |
|
|
Revenue ex-TAC |
176,557 |
224,948 |
209,974 |
219,822 |
234,397 |
276,944 |
240,418 |
230,222 |
5% |
(4)% |
|
|
Americas |
63,500 |
99,391 |
79,146 |
84,103 |
86,457 |
121,328 |
81,174 |
87,279 |
4% |
8% |
|
|
EMEA |
70,829 |
80,731 |
81,509 |
85,077 |
91,722 |
100,357 |
102,718 |
88,503 |
4% |
(14)% |
|
|
APAC |
42,228 |
44,826 |
49,319 |
50,642 |
56,218 |
55,259 |
56,526 |
54,440 |
7% |
(4)% |
|
|
Adjusted EBITDA |
53,532 |
82,995 |
56,454 |
54,086 |
79,116 |
119,928 |
77,932 |
68,774 |
27% |
(12)% |
|
|
Cash flow from operating activities |
43,631 |
71,658 |
44,238 |
60,491 |
61,727 |
79,002 |
84,527 |
40,341 |
(33)% |
(52)% |
|
|
Capital expenditures |
19,907 |
22,981 |
28,206 |
27,055 |
27,773 |
25,476 |
32,567 |
17,847 |
(34)% |
(45)% |
|
|
Capital expenditures / Revenue |
5% |
4% |
5% |
5% |
5% |
4% |
6% |
3% |
(40)% |
(50)% |
|
|
Net cash position |
407,158 |
270,318 |
303,813 |
308,185 |
357,983 |
414,111 |
483,874 |
480,285 |
56% |
(1)% |
|
|
Headcount |
2,212 |
2,503 |
2,582 |
2,690 |
2,712 |
2,764 |
2,675 |
2,678 |
(0.4)% |
0.1% |
|
|
Days Sales Outstanding (days – end of month) |
56 |
53 |
56 |
57 |
56 |
57 |
60 |
61 |
N.A |
N.A |
|
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