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Criteo S.A. (CRTO)·Q1 2025 Earnings Summary

Executive Summary

  • Record Q1 2025: Revenue $451.43M (+0.3% YoY), Contribution ex-TAC $264.37M (+4% YoY), Adjusted EBITDA $92.15M with 35% margin, Adjusted diluted EPS $1.10; GAAP diluted EPS $0.66 .
  • Strong beat vs company guidance: Q1 guide was Contribution ex-TAC $256–$260M and Adjusted EBITDA $68–$72M; actuals were $264.37M and $92.15M, respectively .
  • Versus Street: Revenue $451.43M vs consensus $260.26M*, Adjusted EPS $1.10 vs $0.77*; EBITDA $73.86M (SPGI definition) vs $71.08M*; all above consensus at headline level (definitions differ) .
  • Guidance pivot and catalyst mix: FY25 Contribution ex-TAC growth lowered to low-single-digit from mid-single-digit; Q2 guide calls Contribution ex-TAC $272–$278M and Adjusted EBITDA $60–$66M amid macro softness and a large retail media client curtailing services from Nov 1, 2025 (≈$25M 2025 impact; ≈$75M first 10 months of 2026) .
  • Strategic positives: Google maintaining third‑party cookies in Chrome provides near-term and long-term clarity for Performance Media; accelerated AI rollout (Commerce Go), on-site video launch, and deeper agency partnerships support medium-term growth .

What Went Well and What Went Wrong

What Went Well

  • Retail Media strength: Revenue +17% YoY to $59.50M and Contribution ex-TAC +17% to $58.79M (18% at constant currency); same‑retailer retention 120% .
  • Product and format expansion: Onsite Video launched to GA with early results (e.g., 280% CTR increase and 460% sales lift when paired with Sponsored Products at Albertsons) .
  • Platform and AI momentum: CEO emphasized “Criteo sits at the center of commerce and media… powerful combination” and highlighted Commerce Go/AI automation and expanding agency/API partnerships as growth levers .

What Went Wrong

  • Macro softness and category mix: April trends were softer; beauty and fashion down; U.S. retail department stores weaker; travel strong (+44%) but discretionary categories under pressure .
  • Near-term retail media headwind: Largest retail media client to curtail managed services from Nov 1, 2025; expected impact ≈$25M in 2025 (largely Q4) and ≈$75M over first 10 months of 2026 .
  • Q2 outlook cautious: Contribution ex-TAC guided down 2% to flat YoY at CC; Adjusted EBITDA $60–$66M on macro volatility, FX headwinds, and phasing of expenses .

Financial Results

Key Financials vs prior periods

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$450.06 $458.89 $553.04 $451.43
Gross Profit Margin %48% 51% 54% 52%
Contribution ex-TAC ($USD Millions)$253.89 $266.10 $334.40 $264.37
Adjusted EBITDA ($USD Millions)$70.68 $82.00 $144.01 $92.15
Adjusted EBITDA Margin (% of Contribution ex-TAC)28% 31% 43% 35%

EPS

MetricQ1 2024Q3 2024Q4 2024Q1 2025
GAAP Diluted EPS ($)$0.12 $0.11 $1.23 $0.66
Adjusted Diluted EPS ($)$0.80 $0.96 $1.75 $1.10

Q1 2025 vs Wall Street consensus (S&P Global)

MetricConsensusActual
Revenue ($USD Millions)$260.26*$451.43
Primary EPS ($)$0.77*$1.10
EBITDA ($USD Millions)$71.08*$73.86*

Asterisk indicates values retrieved from S&P Global.

Segment Breakdown – Q1 2025

SegmentRevenue ($USD Millions)YoY %Contribution ex-TAC ($USD Millions)YoY %
Retail Media$59.50 +17% $58.79 +17%
Performance Media$391.94 (2)% $205.58 +1%

KPIs

KPIQ1 2024Q4 2024Q1 2025
Clients (count)17,767 17,269 17,084
Media Spend ($USD Millions)——$919
Cash from Operating Activities ($USD Millions)$14.02 $169.45 $62.34
Free Cash Flow ($USD Millions)$0.79 $146.06 $45.25
Days Sales Outstanding (days)66 62 68
Capital Expenditures ($USD Millions)$13.84 $23.39 $17.09

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Contribution ex-TAC growth (constant currency)FY 2025Mid-single-digit Low-single-digit Lowered
Adjusted EBITDA margin (% of Contribution ex-TAC)FY 2025~33%–34% ~33%–34% Maintained
Contribution ex-TAC ($M)Q1 2025$256–$260 Actual $264.37 Beat
Adjusted EBITDA ($M)Q1 2025$68–$72 Actual $92.15 Beat
Contribution ex-TAC ($M)Q2 2025—$272–$278 New
Adjusted EBITDA ($M)Q2 2025—$60–$66 New
Normalized tax rateFY 2025—22%–27% New
CapExFY 2025—≈$100M New
FCF conversion (of Adjusted EBITDA)FY 2025—>45% New
FX impact on Contribution ex-TACFY 2025—+$10–$12M YoY (est.) New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 & Q4 2024)Current Period (Q1 2025)Trend
AI/automation & platform (Commerce Go)Building Commerce Audiences and full-funnel activation; Adjusted EBITDA margin expansion to 35% FY24 Commerce Go rollout; 45% QoQ increase in campaign volume; focus on “gray box” transparency and parameter control Improving execution
Retail Media supply/demand & formatsRetail Media Contribution ex-TAC +23% in Q3; +22% in Q4; expanded to 3,500 brands 3,800 brands; Onsite Video GA launch; strong on-site and off-site traction; but large client curtailment from Nov 2025 Mixed: expanding footprint, near-term headwind
Macro & category mixPositive momentum into holiday; FY24 double-digit Contribution ex-TAC growth Softer April; beauty/fashion down; travel +44%; cautious outlook in discretionary categories Cautious
Regulatory (Chrome cookies)Ongoing uncertainty discussed in filings Google maintains third‑party cookies; Criteo sees positive implications and clarity for addressability Risk reduced
Agency partnershipsStrategic relationships highlighted Tinuiti preferred partnership; deeper agency/API integrations underway Strengthening

Management Commentary

  • CEO: “Criteo sits at the center of commerce and media, a powerful combination. I'm excited about our opportunities ahead and confident in our ability to deliver long‑term value for our shareholders.”
  • CEO: “We will pull cost and productivity levers as needed to maintain 2025 adjusted EBITDA margins in the 33% to 34% range and generate industry‑leading cash flows.”
  • CFO: “Our first quarter performance reflects strong execution and financial discipline… Adjusted diluted EPS was $1.10… Operating cash flow was $62 million and free cash flow was $45 million in Q1.”
  • CFO: “We benefit from a strong financial position and pristine balance sheet with solid cash generation and no long‑term debt… total liquidity $810 million as of the end of March.”

Q&A Highlights

  • Retail Media client curtailment: Management expects services removal (demand generation/client services, billings/collections) from Nov 1, 2025; tech platform remains under multi‑year contract; impact ≈$25M in 2025 (largely Q4) and ≈$75M over first 10 months of 2026 .
  • In‑housing risk: Not seen as continuing trend; Criteo’s demand generation and tech differentiation remain intact .
  • Macro lens: April softness across categories; none down more than ~10%; travel strong; discretionary categories face tighter budgets .
  • Privacy Sandbox: Investments in hybrid addressability/AI are accretive; retargeting pools expected to expand over time; limited incremental testing costs going forward .
  • Self‑service capabilities: Commerce Go designed as a “gray box” with transparent controls and measurement; targeted to scale impact in 2026 .

Estimates Context

  • Q1 2025 delivered a broad beat vs consensus: Revenue $451.43M vs $260.26M*, Primary EPS $1.10 vs $0.77*, EBITDA $73.86M vs $71.08M*; note SPGI “Primary EPS” typically aligns to adjusted/normalized EPS, and EBITDA definitions may differ from company “Adjusted EBITDA” .
  • With guidance lowered for FY25 Contribution ex-TAC growth and Q2 cautions, Street may reduce near-term top-line growth assumptions, while margin durability (33%–34%) could anchor profitability forecasts .

Asterisk indicates values retrieved from S&P Global.

Key Takeaways for Investors

  • Q1 print was operationally strong (Contribution ex-TAC +4%, Adjusted EBITDA +30% YoY, FCF $45M), with better‑than‑guided profitability and margins; underscores cost discipline .
  • The largest retail media client curtailment creates a defined headwind window (Q4’25 through late 2026); focus turns to offsetting via broader retailer base and agency‑driven demand .
  • Cookie clarity from Google is a tailwind for Performance Media addressability; expect improved scale and performance for AI‑driven audiences and retargeting .
  • Near‑term outlook is cautious (Q2 guide down 2% to flat YoY at CC for Contribution ex-TAC); monitor macro signals and category spend trends, especially discretionary .
  • Product flywheel expanding: Onsite Video GA and off‑site activations bolster full‑funnel retail media; Commerce Go self‑service can lower cost‑to‑serve and accelerate SMB demand onboarding .
  • Capital allocation remains supportive (ongoing buyback; $810M liquidity); margin guide (33%–34%) and FCF conversion (>45%) point to resilient cash generation .
  • Trading lens: Expect sentiment volatility around Q2 print and into Q4 as the client transition approaches; upside catalysts include agency pipeline conversion, on‑site video adoption, and evidence of Commerce Go scaling .