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Criteo S.A. (CRTO)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 delivered mixed top-line but strong profitability: revenue fell 2% YoY to $553.0M while gross profit rose 9% to $301.0M and Contribution ex‑TAC grew 6% to $334.4M . Adjusted EBITDA of $144.0M was up 4% YoY with a 43% margin .
  • Criteo beat its Q4 guidance: Contribution ex‑TAC of $334.4M versus $327–$333M guided, and Adjusted EBITDA of $144.0M versus $114–$120M guided; upside was driven by higher late‑quarter volume‑tier fees, FX benefit, and lower bad debt/people costs timing .
  • Retail Media remained the engine: Q4 segment revenue +20% YoY to $91.9M and Contribution ex‑TAC +22% to $90.2M; Performance Media revenue −6% but segment Contribution ex‑TAC +1% on Commerce Audiences strength .
  • FY25 outlook implies steady execution: mid‑single‑digit Contribution ex‑TAC growth at cc and Adjusted EBITDA margin ~33–34%; Q1’25 guide Contribution ex‑TAC $256–$260M and Adjusted EBITDA $68–$72M, with FX headwinds expected .
  • Capital returns and leadership change are catalysts: Board lifted remaining buyback authorization to up to $200M and appointed Michael Komasinski as CEO effective Feb 15, 2025 .

What Went Well and What Went Wrong

What Went Well

  • Retail Media outperformance: Q4 Retail Media revenue +20% YoY and Contribution ex‑TAC +22%, aided by strong on‑site, off‑site uptick, and network effects . CFO: “we benefited from higher fees for achieving annual volume thresholds…late in the quarter” (tailwind also slightly benefits Q1’25) .
  • Profitability > guidance: Adjusted EBITDA of $144.0M beat the $114–$120M outlook; CFO called out ~$3M from top‑line leverage, ~$5M FX benefit, and ~$(4)M lower bad‑debt/social charges/timing as drivers .
  • Strategic momentum: 3,500 brands and 225 retailers on the platform; agencies are “increasingly leverage[ing] our comprehensive commerce media platform as an enterprise play,” and Microsoft retail media partnership set to launch first retailers in H1’25 .

What Went Wrong

  • Headline revenue down YoY: Q4 revenue −2% YoY to $553.0M as Performance Media revenue fell 6%, reflecting lower retargeting and AdTech services/supply despite Commerce Audiences growth .
  • Operating expense growth: Q4 GAAP opex +10% YoY to $206.5M and non‑GAAP opex +12% to $165.0M on planned growth investments and R&D scaling .
  • AdTech services headwinds: Management cited reduced spending from a major ad tech client in the media trading marketplace, partially mitigated by actions and expected to lap in 2025 .

Financial Results

Headline Metrics (USD Millions, except per-share and %)

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenue$566.3 $471.3 $458.9 $553.0
Gross Profit$276.6 $232.8 $231.9 $301.0
Gross Margin %49% 49% 51% 54%
Contribution ex‑TAC$316.4 $267.1 $266.1 $334.4
Adjusted EBITDA$138.6 $93.4 $82.0 $144.0
Adj EBITDA Margin % (of ex‑TAC)44% 35% 31% 43%
Net Income$62.1 $28.1 $6.1 $71.9
Diluted EPS (GAAP)$1.02 $0.46 $0.11 $1.23
Adjusted Diluted EPS$1.52 $1.08 $0.96 $1.75

Notes: Q4’24 vs guidance: Contribution ex‑TAC $334.4M vs $327–$333M ; Adjusted EBITDA $144.0M vs $114–$120M .

Segment Breakdown (USD Millions)

SegmentQ4 2023 RevenueQ4 2024 RevenueQ4 2023 Contrib ex‑TACQ4 2024 Contrib ex‑TAC
Retail Media$76.6 $91.9 $74.2 $90.2
Performance Media$489.7 $461.1 $242.2 $244.2
Total$566.3 $553.0 $316.4 $334.4

KPIs and Cash Flow

KPIQ4 2023Q3 2024Q4 2024
Clients (#)18,197 17,162 17,269
Americas Revenue ($M)280.6 206.8 274.6
EMEA Revenue ($M)189.3 161.7 183.4
APAC Revenue ($M)96.4 90.3 95.0
Cash from Operations ($M)161.3 57.5 169.5
Free Cash Flow ($M)141.6 38.6 146.1
DSO (days)58 65 62

Guidance Changes

MetricPeriodPrevious GuidanceCurrent/ActualChange
Contribution ex‑TACQ4 2024$327–$333M (10/30/24) $334.4M (actual) Beat
Adjusted EBITDAQ4 2024$114–$120M (10/30/24) $144.0M (actual) Beat
Contribution ex‑TAC growth (cc)FY 2025N/AMid‑single‑digit New
Adjusted EBITDA margin (of ex‑TAC)FY 2025N/A~33–34% New
Retail Media ex‑TAC growth (cc)FY 2025N/A20–22% New
Performance Media ex‑TAC growth (cc)FY 2025N/ALow single‑digit New
FX impact on ex‑TACFY 2025N/A$(15)–$(20)M headwind New
Normalized tax rateFY 2025N/A22%–27% New
CapexFY 2025N/A$90–$100M New
FCF conversionFY 2025N/A~45% of Adj EBITDA (pre non‑recurring) New
Shares outstandingFY 2025N/AFlat (assumption) New
Contribution ex‑TACQ1 2025N/A$256–$260M (cc +3% to +5%) New
Adjusted EBITDAQ1 2025N/A$68–$72M New
FX impact on ex‑TACQ1 2025N/A$(5)–$(7)M headwind New
Share buyback authorizationAs of Jan 31, 2025$44M remaining at 12/31/24 Increased to up to $200M remaining Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
AI/automation & Commerce GoStrong AI‑driven performance; operating leverage; introduced Microsoft collab (Q2) .Rolled out Commerce Go self‑service; “hundreds of campaigns” launched; moving to GA; small clients >50% of Commerce Go revenue .Accelerating deployment and adoption.
Retail Media strengthRetail Media ex‑TAC +24% (Q2), +23% (Q3) at cc .Q4 revenue +20%, ex‑TAC +22%; on‑site led; off‑site uptick; volume‑based tier fees helped .Sustained double‑digit growth; monetization improving.
Performance Media mixQ2/Q3: Commerce Audiences growth; retargeting resilient to slightly up; ad tech services pressured .Q4: Revenue −6% but ex‑TAC +1%; Commerce Audiences up; ad tech services down 4% with mitigation actions .Mix shift to audiences continues; lapping headwinds in 2025.
Cookie deprecation stanceTransitioning away from dependence (implied) .“No longer plan our business around the deprecation of third‑party cookies” .Risk de‑emphasis; diversified solutions.
Agencies & enterprise positioningBuilding HoldCo relationships (Q2/Q3) .Agencies now view Criteo as an “enterprise‑level partner”; Commerce Max/Commerce Grid/Go pathways .Deeper agency integration.
Microsoft partnershipAnnounced strategic collaboration in Q2 .Retailers launch H1’25; minimal Q1’25 impact; ramp 2H’25 .Near‑term ramp catalyst.
Macro/political ads—Post‑US election normalization; Criteo has no political ad spend .Temporary Q4 start effect abated.
Regulatory/legalCNIL reversal benefited 2023 comps (FY commentary) .No new issues called out; 2024 opex growth partly reflects prior year CNIL reversal .Stable.

Management Commentary

  • CEO Megan Clarken: “We…delivered our strongest financial performance to date…third consecutive year of double‑digit growth” and highlighted the platform’s unified commerce value proposition and agency momentum .
  • CFO Sarah Glickman on Q4 beat drivers: “about $3M [from] top line outperformance…about $5M…from the weaker euro…lower bad debt expense…about $4M…some of that is timing” .
  • CPO Todd Parsons on positioning: “We can be seen as an enterprise‑level partner…like Google, but incredibly focused on commerce all day every day” .
  • On cookies: “We…no longer plan our business around the deprecation of third‑party cookies” .
  • On off‑site: Enabling retailers to extend reach while tying KPIs clearly to purchase to ensure incrementality .

Q&A Highlights

  • Retail Media take rates: CFO indicated resilient take rates “above the mid‑teens,” with Q4 upside from strong spend and tiered‑fee thresholds; on‑site sponsored drove most growth .
  • Amazon retail ad service: Management downplayed competitive overlap, citing neutrality, data‑sharing concerns for retailers, and broader format coverage vs sponsored products .
  • Microsoft partnership: Some H1’25 retailer launches; limited Q1’25 impact; expected ramp in H2’25 .
  • Margin drivers/quality: Q4 EBITDA beat aided by FX, collections/DSO improvements (lower bad debt), and hiring timing; reiterated FY25 EBITDA margin target 33–34% while investing in AI and retail media .
  • Social channel expansion: Preparing SKU‑level activation on Meta and broader social with outcome‑constant performance across channels .

Estimates Context

  • S&P Global Wall Street consensus for Q4 2024 EPS and revenue was unavailable at the time of analysis due to provider limits. As a proxy, Criteo’s Q4 actuals exceeded its October guidance for both Contribution ex‑TAC ($334.4M vs $327–$333M) and Adjusted EBITDA ($144.0M vs $114–$120M) .
  • Where estimate comparisons are typically shown, we recommend updating once SPGI consensus is accessible to refine beat/miss assessment (particularly on EPS and revenue).

Key Takeaways for Investors

  • Quality over quantity in Q4: despite −2% revenue, mix and pricing drove 9% gross profit and 6% ex‑TAC growth with a 43% adj. EBITDA margin, underpinning operating leverage .
  • Retail Media is the growth flywheel: sustained 20%+ growth with on‑site leadership and growing off‑site; agency channel scaling; this supports FY25 Retail Media ex‑TAC +20–22% outlook .
  • Guidance is conservative but credible: FY25 mid‑single‑digit ex‑TAC growth and 33–34% margins, with FX headwinds embedded and H2 ramp from Microsoft and product rollouts offering upside optionality .
  • Performance Media stabilization: revenue headwinds persist, but ex‑TAC growth from Commerce Audiences and social expansion should cushion mix while ad‑tech services headwinds are set to lap in 2025 .
  • Capital allocation supportive: authorization increased to up to $200M remaining; 2024 buybacks of $225M reduced share count, enhancing per‑share metrics .
  • Leadership transition: New CEO Michael Komasinski brings dentsu/Merkle and retail media pedigree—no change to strategy, likely acceleration in enterprise GTM and AI‑driven innovation .
  • Near‑term trading setup: Stock could respond to the Q4 guidance beat, Retail Media momentum, and raised buyback capacity; watch Q1’25 ex‑TAC/EBITDA delivery against guidance and updates on Microsoft rollouts .