PR Newswire | Oct 28, 2020 07:02AM EDT

10/28 06:00 CDT

Criteo Reports Third Quarter 2020 Financial ResultsRevenue ex-TAC and Adjusted EBITDA Above Top End of GuidanceManagement to Provide Strategic Update on Earnings Call NEW YORK, Oct. 28, 2020

NEW YORK, Oct. 28, 2020 /PRNewswire/ -- Criteo S.A. (NASDAQ: CRTO), the global technology company powering the world's marketers with trusted and impactful advertising, today announced financial results for the third quarter ended September 30, 2020 that exceeded the top end of its most recent quarterly guidance, despite the continued impact of the pandemic.

Third Quarter 2020 Financial Highlights:

Our financial results reflect the continued impact of the pandemic on our business. The following table summarizes our consolidated financial results for the three months ended September 30, 2019 and 2020:

Three Months Ended

September 30,

YoY 2020 2019 Change

(in millions, except EPS data)

GAAP Results

Revenue $470 $523 (10) %

Net Income $5 $21 (74) %

Diluted EPS $0.09 $0.28 $ (0.19)

Cash from operating activities$51 $43 18 %

Net cash position $627 $409 53 %



Non-GAAP Results^1

Revenue ex-TAC $186 $221 (16) %

Revenue ex-TAC margin 40 %42 %

Adjusted EBITDA $49 $64 (23) %

Adjusted diluted EPS $0.40 $0.54 $ (0.14)

Free Cash Flow $38 $19 98 %

Megan Clarken, Chief Executive Officer of Criteo, said, "We are pleased to deliver better performance than expected on both the top and bottom lines, demonstrating the continued resilience of our business during the pandemic, relentless focus on improving execution and the talent, strength and dedication of our great people."

Clarken continued: "As we look forward, we are transforming our company to a Commerce Media Platform over the next few years to maximize the value of our unique Reach and Commerce assets, enabling our strong customer base, including global brands and retailers, to optimize their sales and digital advertising returns. We believe we have a path to growth over time with a clear product roadmap, a dedicated leadership team and the financial strength to support growth investments."

Operating Highlights

* Criteo and The Trade Desk collaborate on industry wide Unified ID 2.0, an upgraded alternative to third-party cookies. * Total clients grew 3% year-over-year to close to 20,600 after adding over 200 net new clients, the highest number since Q4 2019. * Same-client revenue2 declined 6% year-over-year (vs. 13% decline in Q2 2020) and same-client Revenue ex-TAC2 decreased 11% year-over-year (vs. 14% decline in Q2 2020) at constant currency3, including approximately 17 points directly attributable to the COVID-19 disruption on both. * New solutions grew 43% year-over-year to 19% of total Revenue ex-TAC. * Retail Media grew close to 60% year-over-year, and same-client Revenue ex-TAC3 for Retail Media increased 70% year-over-year. * Our direct header-bidding technology now connects to close to 5,000 direct publishers.

___________________________________________________

Revenue excluding Traffic Acquisition Costs, or Revenue ex-TAC, Revenue^ ex-TAC margin, Adjusted EBITDA, Adjusted EBITDA at constant currency,1 Adjusted EBITDA margin, Adjusted diluted EPS, Free Cash Flow and growth at constant currency are not measures calculated in accordance with U.S. GAAP.

^ Same-client revenue or Revenue ex-TAC is the revenue or Revenue ex-TAC2 generated by clients that were live with us in a given quarter and still live with us the same quarter in the following year.

Constant currency measures exclude the impact of foreign currency3 fluctuations and is computed by applying the 2019 average exchange rates for the relevant period to 2020 figures.

Financial Summary

Revenue for the quarter was $470 million and Revenue ex-TAC was $186 million. Adjusted EBITDA was over $49 million, resulting in an adjusted diluted EPS of $0.40. These all reflect year-over-year declines, largely due to the anticipated negative COVID impact. Excluding the impact of the pandemic, we estimate that Revenue ex-TAC declined about 2% in Q3 2020. Free cash flow was $38 million in Q3 2020, growing 98% year-over-year, and $98 million for the nine months 2020. We have $627M cash on the balance sheet, which includes $158M from the Revolving Credit Facility.

Sarah Glickman, Chief Financial Officer, said, "During Q3 we continued to make progress against all four of our strategic pillars and I am pleased that we were able to control costs and grow free cash flow. Our goal now is to return to growth and ensure smart investment allocation while reducing fixed costs."

Revenue and Revenue ex-TAC

Revenue declined 10% year-over-year, or 11% at constant currency, to $470 million (Q3 2019: $523 million), after an estimated $80 million net negative business impact from the COVID-19 disruption, or approximately 15 points of the year-over-over decline at constant currency. Revenue ex-TAC decreased 16% year-over-year, or 16% at constant currency, to $186 million (Q3 2019: $221 million), after an approximately $33 million net negative business impact from the COVID-19 disruption, or approximately 15 points of the year-over-over decline at constant currency. Growth in our midmarket business and increased adoption of new solutions were offset by the decline in our core business with large clients, primarily as a result of the COVID-19 pandemic impact, in particular on our Travel and Classifieds clients. Revenue ex-TAC as a percentage of revenue, or Revenue ex-TAC margin, was 40% (Q3 2019: 42%).

* In the Americas, Revenue declined 4% year-over-year, or 3% at constant currency, to $205 million and represented 43% of total Revenue. Revenue ex-TAC declined 13% year-over-year, or 11% at constant currency, to $74 million and represented 40% of total Revenue ex-TAC. * In EMEA, Revenue declined 10% year-over-year, or 13% at constant currency, to $168 million and represented 36% of total Revenue. Revenue ex-TAC declined 14% year-over-year, or 17% at constant currency, to $71 million and represented 38% of total Revenue ex-TAC. * In Asia-Pacific, Revenue declined 20% year-over-year, or 21% at constant currency, to $98 million and represented 21% of total Revenue. Revenue ex-TAC declined 23% year-over-year, or 24% at constant currency, to $42 million and represented 22% of total Revenue ex-TAC.

Net Income and Adjusted Net Income

Net income decreased 74% year-over-year to $5 million (Q3 2019: $21 million). Net income margin as a percentage of revenue was 1% (Q3 2019: 4%). In the course of the third quarter 2020, we incurred $12 million in restructuring related and transformation costs. Net income available to shareholders of Criteo S.A. decreased 72% year-over-year to $5 million, or $0.09 per share on a diluted basis (Q3 2019: $19 million, or $0.28 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 related and transformation costs and the tax impact of these adjustments, decreased 31% year-over-year to $24 million, or $0.40 per share on a diluted basis (Q3 2019: $35 million, or $0.54 per share on a diluted basis).

Adjusted EBITDA and Operating Expenses

Adjusted EBITDA decreased 23% year-over-year, or 27% at constant currency, to $49 million (Q3 2019: $64 million), driven by the Revenue ex-TAC performance over the period, including the still meaningful impact of the COVID-19 pandemic, partly offset by effective expense management measures. Adjusted EBITDA as a percentage of Revenue ex-TAC, or Adjusted EBITDA margin, was 27% (Q3 2019: 29%).

Operating expenses decreased 11% or $17 million, to $143 million (Q3 2019: $160 million), mostly driven by lower headcount-related expense and disciplined expense management across the Company. Operating expenses, excluding the impact of equity awards compensation expense, pension costs, restructuring related and transformation costs, depreciation and amortization and acquisition-related costs and deferred price consideration, which we refer to as Non-GAAP Operating Expenses, decreased 15% or $21 million, to $117 million (Q3 2019: $138 million), largely driven by lower headcount and robust expense management across the Company.

The Company intends to manage its expense base in a disciplined way, while also investing in growth and innovation.

Cash Flow, Cash and Financial Liquidity Position

Cash flow from operating activities increased 18% year-over-year to $51 million (Q3 2019: $43 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, increased 98% to $38 million (Q3 2019: $19 million), representing 77% of Adjusted EBITDA for the third quarter (Q3 2019: 30%) and 66% for the first nine months 2020 (9 months 2019: 44%).

Cash and cash equivalents increased $208 million compared to December 31, 2019 to $627 million, after spending $44 million on share repurchases in the first nine months 2020, and preemptively drawing $158 million of the Company's (euro)350 million Revolving Credit Facility (RCF) in the second quarter.

The Company had financial liquidity in excess of $870 million, including its cash position and RCF as of September 30, 2020.

Business Outlook

The following forward-looking statements reflect Criteo's expectations as of October 28, 2020.

As of now, we continue to see a significant impact to our business related to the pandemic, continued economic uncertainty, customer demand and supply chain logistics of our clients.

Fourth quarter 2020 guidance:

* We expect Revenue ex-TAC to be between $223 million and $230 million, implying constant-currency decline of approximately 15% at the midpoint. * Assumes less concentrated peak Holiday Season compared to prior years * Assumes continued slow rebound in our Travel and Classifieds verticals * Assumes $17M negative impact from Privacy headwinds in the fourth quarter

* We expect Adjusted EBITDA to be between $81 million and $88 million.

The above guidance for the fourth quarter ending December 31, 2020, assumes the following exchange rates for the main currencies impacting our business: a U.S. dollar-euro rate of 0.882, a U.S. dollar-Japanese Yen rate of 107, a U.S. dollar-British pound rate of 0.79, a U.S. dollar-Korean Won rate of 1,196 and a U.S. dollar-Brazilian real rate of 5.23.

The above guidance assumes no acquisitions are completed during the fourth quarter ending December 31, 2020.

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. The variability of the above charges could potentially have a significant impact on our future U.S. GAAP financial results.

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 ("SEC"): Revenue ex-TAC, Revenue ex-TAC by Region, Revenue ex-TAC margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted diluted EPS, 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 related and transformation costs, acquisition-related costs and deferred price consideration.

During the period, we have broadened the definition of Adjusted EBITDA to exclude costs related to restructuring and transformation costs, in addition to restructuring charges previously excluded. 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 related and transformation 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 related and transformation costs and the tax impact of these adjustments. Adjusted Net Income and Adjusted diluted EPS 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 related and transformation costs and the tax impact of these adjustments, Adjusted Net Income and Adjusted diluted EPS can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted Net Income and Adjusted diluted EPS 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 related and transformation 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 December 31, 2020, 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 innovate and respond to changes in technology, uncertainty regarding the scope and impact of the COVID-19 pandemic on our employees, operations, revenue and cash flows, 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, the impact of consumer resistance to the collection and sharing of data, our ability to access data through third parties, 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 2, 2020, and in subsequent Quarterly Reports on Form 10-Q as well as future filings and reports by the Company. Importantly, at this time, the COVID-19 pandemic is having a significant impact on Criteo's business, financial condition, cash flow and results of operations. There are significant uncertainties about the duration and the extent of the impact of the virus.

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 senior management team will discuss the Company's earnings and provide a strategic update on a call that will take place today, October 28, 2020, at 8:00AM EDT, 1:00PM CEST. The conference call will be webcast live on the Company's website http://ir.criteo.com and will be available for replay.

* 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 global technology company powering the world's marketers with trusted and impactful advertising. 2,600 Criteo team members partner with over 20,000 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.

Contacts

Criteo Investor RelationsEdouard Lassalle, SVP, Market Relations & Capital Markets, e.lassalle@criteo.comClemence Vermersch, Associate, Investor Relations, c.vermersch@criteo.com

Criteo Public RelationsJessica Meyers, Director, Public Relations, Americas, j.meyers@criteo.com

Financial information to follow

CRITEO S.A. Consolidated Statement of Financial Position (U.S. dollars in thousands, unaudited)



December 31,September 2019 30, 2020

Assets

Current assets:

Cash and cash equivalents $418,763 $626,744

Trade receivables, net of allowances of $16.1 million and $38.3 481,732 335,583 million at December 31, 2019 and September 30, 2020, respectively

Income taxes 21,817 11,422

Other taxes 60,924 58,123

Other current assets 17,225 19,278

Total current assets 1,000,461 1,051,150

Property, plant and equipment, net 194,161 195,679

Intangible assets, net 86,886 78,340

Goodwill 317,100 319,595

Right of Use Asset - operating lease 142,044 120,283

Marketable securities - 23,416

Non-current financial assets 21,747 20,174

Deferred tax assets 27,985 34,731

Total non-current assets 789,923 792,218

Total assets $1,790,384$1,843,368



Liabilities and shareholders' equity

Current liabilities:

Trade payables $390,277 $293,480

Contingencies 6,385 960

Income taxes 3,422 276

Financial liabilities - current portion 3,636 167,033

Lease liability - operating - current portion 45,853 48,691

Other taxes 50,099 45,998

Employee - related payables 74,781 68,709

Other current liabilities 35,886 43,299

Total current liabilities 610,339 668,446

Deferred tax liabilities 9,272 8,439

Retirement benefit obligation 8,485 10,634

Financial liabilities - non-current portion 769 44

Lease liability - operating - non-current portion 117,988 90,560

Other non-current liabilities 5,543 3,333

Total non-current liabilities 142,057 113,010

Total liabilities 752,396 781,456

Commitments and contingencies

Shareholders' equity:

Common shares, (eu)0.025 par value, 66,197,181 and 66,083,172 shares authorized, issued and outstanding at December 31, 2019 and 2,158 2,155 September 30, 2020, respectively.

Treasury stock, 3,903,673 and 5,989,258 shares at cost as of (74,900) (92,450) December 31, 2019 and September 30, 2020, respectively.

Additional paid-in capital 668,389 685,841

Accumulated other comprehensive loss (40,105) (19,658)

Retained earnings 451,725 452,932

Equity - attributable to shareholders of Criteo S.A. 1,007,267 1,028,820

Non-controlling interests 30,721 33,092

Total equity 1,037,988 1,061,912

Total equity and liabilities $1,790,384$1,843,368

CRITEO S.A. Consolidated Statement of Income (U.S. dollars in thousands, except share and per share data, unaudited)



Three Months Ended Nine Months Ended

September 30, September 30,

2019 2020 YoY 2019 2020 YoY Change Change



Revenue $522,606 $470,345 (10) %$1,608,876$1,411,335(12) %



Cost of revenue

Traffic acquisition cost (301,901) (284,401) (6) %(928,559) (839,463) (10) %

Other cost of revenue (31,101) (34,608) 11 %(86,205) (102,328) 19 %



Gross profit 189,604 151,336 (20) %594,112 469,544 (21) %



Operating expenses:

Research and development expenses (41,414) (30,954) (25) %(132,006) (99,716) (24) %

Sales and operations expenses (85,985) (83,659) (3) %(277,397) (244,414) (12) %

General and administrative expenses (32,835) (28,672) (13) %(102,372) (83,772) (18) %

Total Operating expenses (160,234) (143,285) (11) %(511,775) (427,902) (16) %

Income from operations 29,370 8,051 (73) %82,337 41,642 (49) %

Financial expense (900) (491) (45) %(4,228) (1,828) (57) %

Income before taxes 28,470 7,560 (73) %78,109 39,814 (49) %

Provision for income taxes (7,913) (2,267) (71) %(23,614) (11,943) (49) %

Net Income $20,557 $5,293 (74) %$54,495 $27,871 (49) %



Net income available to shareholders of Criteo S.A.$18,778 $5,227 (72) %$48,721 $26,402 (46) %

Net income available to non-controlling interests $1,779 $66 (96) %$5,774 $1,469 (75) %



Weighted average shares outstanding used in computing per share amounts:

Basic 64,868,54560,080,598 64,600,869 61,059,345

Diluted 66,067,04561,027,795 65,916,219 61,644,827



Net income allocated to shareholders per share:

Basic $0.29 $0.09 (69) %$0.75 $0.43 (43) %

Diluted $0.28 $0.09 (68) %$0.74 $0.43 (42) %

CRITEO S.A. Consolidated Statement of Cash Flows (U.S. dollars in thousands, unaudited)



Three Months Ended Nine Months Ended

September 30, September 30,

2019 2020 YoY 2019 2020 YoY Change Change

Net income $20,557 $5,293 (74) %$54,495 $27,871 (49) %

Non-cash and non-operating items 18,776 39,831 NM 72,735 105,742 45 %

- Amortization and provisions 19,455 24,680 27 %57,381 79,631 39 %

- Equity awards compensation expense ^(1) 11,165 6,803 (39) %36,760 22,465 (39) %

- Net gain or loss on disposal of non-current assets - 591 NM - 2,734 NM

- Change in deferred taxes (2,710) (80) (97) %(1,374) (7,697) NM

- Change in income taxes (9,309) 6,684 NM (19,939) 7,411 NM

- Other 175 1,153 NM (93) 1,198 NM

Changes in working capital related to operating activities 3,956 6,032 52 %36,243 7,663 (79) %

- (Increase) / Decrease in trade receivables 14,821 (4,177) NM 120,164 122,529 2 %

- Increase / (Decrease) in trade payables (4,415) 8,494 NM (77,895) (95,303) 22 %

- (Increase) / Decrease in other current assets 638 (2,762) NM 2,150 2,288 6 %

- Increase / (Decrease) in other current liabilities (10,177) 6,303 NM (4,726) (20,145) NM

- Change in operating lease liabilities and right of use assets3,089 (1,826) NM (3,450) (1,706) (51) %

CASH FROM OPERATING ACTIVITIES 43,289 51,156 18 %163,473 141,276 (14) %

Acquisition of intangible assets, property, plant and equipment (27,239) (16,308) (40) %(69,343) (57,037) (18) %

Change in accounts payable related to intangible assets, property, plant 3,295 3,410 3 %(11,077) 13,870 NM and equipment

(Payment for) disposal of a business, net of cash acquired (disposed) 106 (3) NM (4,582) (3) (100) %

Change in other non-current financial assets (165) (280) 70 %(1,349) (20,629) NM

CASH USED FOR INVESTING ACTIVITIES (24,003) (13,181) (45) %(86,351) (63,799) (26) %

Proceeds from borrowings under line-of-credit agreement - 3,193 NM - 157,503 NM

Repayment of borrowings (167) (12) (93) %(506) (181) (64) %

Proceeds from capital increase 725 117 (84) %638 101 (84) %

Repurchase of treasury stocks (17,603) (10,554) (40) %(17,603) (43,655) NM

Change in other financial liabilities (928) (1,083) 17 %(1,167) (2,010) 72 %

CASH (USED FOR) FROM FINANCING ACTIVITIES (17,973) (8,339) (54) %(18,638) 111,758 NM

Effect of exchange rates changes on cash and cash equivalents (14,188) 18,927 NM (13,732) 18,746 NM

Net increase (decrease) in cash and cash equivalents (12,875) 48,563 NM 44,752 207,981 NM

Net cash and cash equivalents at beginning of period 422,053 578,181 37 %364,426 418,763 15 %

Net cash and cash equivalents at end of period $409,178 $626,74453 %$409,178 $626,744 53 %



SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid for taxes, net of refunds $(19,932)$4,337 NM $(44,927)$(12,229)(73) %

Cash paid for interest $(337) $(153) (55) %$(1,095) $(819) (25) %

Share-based compensation expense according to ASC 718 Compensation - stock^ compensation accounted for $10.8 million and $6.5 million of equity awards(1) compensation expense for the quarter ended September 30, 2019 and 2020, respectively, and $35.7 million and $21.4 million of equity awards compensation for the nine months ended September 30, 2019 and 2020, respectively.

CRITEO S.A. Reconciliation of Cash from Operating Activities to Free Cash Flow (U.S. dollars in thousands, unaudited)



Three Months Ended Nine Months Ended

September 30, September 30,

2019 2020 YoY 2019 2020 YoY Change Change



CASH FROM OPERATING ACTIVITIES $43,289$51,15618 %$163,473$141,276(14) %

Acquisition of intangible assets, property, plant and equipment(27,239)(16,308)(40) %(69,343) (57,037) (18) %

Change in accounts payable related to intangible assets, 3,295 3,410 3 %(11,077) 13,870 NM property, plant and equipment

FREE CASH FLOW ^(1) $19,345$38,25898 %$83,053 $98,109 18 %

^ Free Cash Flow is defined as cash flow from operating activities less(1) 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 Nine Months Ended

September 30, September 30,

YoY YoY YoY Change YoY Change Region 2019 2020 Changeat 2019 2020 Changeat Constant Constant Currency Currency

Revenue

Americas $213,937$204,618(4) %(3) %$645,904$582,037(10)%(9) %

EMEA 185,556 167,800 (10)%(13) %589,558 517,535 (12)%(12) %

Asia-Pacific123,113 97,927 (20)%(21) %373,414 311,763 (17)%(17) %

Total 522,606 470,345 (10)%(11) %1,608,8761,411,335(12)%(12) %



Traffic acquisition costs

Americas (129,047)(130,756)1 %3 %(390,083)(366,095)(6) %(5) %

EMEA (103,899)(97,272) (6) %(10) %(328,591)(295,822)(10)%(9) %

Asia-Pacific(68,955) (56,373) (18)%(19) %(209,885)(177,546)(15)%(16) %

Total (301,901)(284,401)(6) %(7) %(928,559)(839,463)(10)%(9) %



Revenue ex-TAC ^(1)

Americas 84,890 73,862 (13)%(11) %255,821 215,942 (16)%(14) %

EMEA 81,657 70,528 (14)%(17) %260,967 221,713 (15)%(14) %

Asia-Pacific54,158 41,554 (23)%(24) %163,529 134,217 (18)%(18) %

Total $220,705$185,944(16)%(16) %$680,317$571,872(16)%(15) %

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(1) 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 Nine Months Ended

September 30, September 30,

2019 2020 YoY 2019 2020 YoY Change Change

Net income $20,557$5,293 (74) %$54,495 $27,871 (49) %

Adjustments:

Financial expense 900 491 (45) %4,228 1,828 (57) %

Provision for income taxes 7,913 2,267 (71) %23,614 11,943 (49) %

Equity awards compensation expense 11,770 6,803 (42) %40,043 22,465 (44) %

Research and development 3,230 3,333 3 %11,458 7,771 (32) %

Sales and operations 4,398 3,190 (27) %16,292 8,380 (49) %

General and administrative 4,142 280 (93) %12,293 6,314 (49) %

Pension service costs 388 572 47 %1,173 1,649 41 %

Research and development 188 286 52 %572 824 44 %

Sales and operations 71 101 42 %214 291 36 %

General and administrative 129 185 43 %387 534 38 %

Depreciation and amortization expense 22,388 21,752 (3) %62,999 66,098 5 %

Cost of revenue 12,193 14,712 21 %32,175 40,581 26 %

Research and development ^(1) 4,249 1,721 (59) %11,260 9,029 (20) %

Sales and operations 4,178 4,176 - %14,151 12,737 (10) %

General and administrative 1,768 1,143 (35) %5,413 3,751 (31) %

Acquisition-related costs - 112 NM - 112 NM

General and administrative - 112 NM - 112 NM

Restructuring related and transformation costs ^(2)303 12,181 NM 2,921 15,606 NM

Research and development 172 1,985 NM 296 3,493 NM

Sales and operations 131 5,357 NM 2,196 6,793 NM

General and administrative - 4,839 NM 429 5,320 NM

Total net adjustments 43,662 44,178 1 %134,978 119,701 (11) %

Adjusted EBITDA ^(3) $64,219$49,471(23) %$189,473$147,572(22) %

^ For the Nine Months Ended September 30, 2020, the Company recognized an(1) accelerated amortization for Manage technology due to a revised useful life in 2019 ($4.0 million in Research and development).

For the Three Months Ended and the Nine Months Ended September 2019, and^ September 2020, respectively, the Company recognized restructuring related(2) and transformation costs following its new organizational structure implemented to support its multi-product platform strategy and office right sizing policy:

Three Months Nine Months Ended Ended

September 30, September 30,

2019 2020 2019 2020

(Gain) from forfeitures of share-based (606)- (3,284)- compensation awards

Depreciation and amortization expense - - 1,228 -

Facilities and impairment related costs - 7,023 1,647 8,817

Payroll related costs 909 2,858 3,330 4,489

Consulting costs related to transformation - 2,300 - 2,300

Total restructuring related and 303 12,1812,921 15,606transformation costs

For the Three Months Ended and the Nine Months Ended September 30, 2020, thecash outflows related to restructuring related and transformation costs were$6.2 million, and $13.0 million respectively, and were mainly compromised ofpayroll costs, broker fees and termination penalties related to facilities.

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 related and transformation 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 related and transformation 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(3) 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 Nine Months Ended

September 30, September 30,

2019 2020 YoY 2019 2020 YoY Change Change

Research and Development expenses $(41,414) $(30,954) (25) %$(132,006)$(99,716) (24) %

Equity awards compensation expense 3,230 3,333 3 %11,458 7,771 (32) %

Depreciation and Amortization expense ^(1) 4,249 1,721 (59) %11,260 9,029 (20) %

Pension service costs 188 286 52 %572 824 44 %

Restructuring related and transformation costs ^(2)172 1,985 NM 296 3,493 NM

Non GAAP - Research and Development expenses (33,575) (23,629) (30) %(108,420) (78,599) (28) %

Sales and Operations expenses (85,985) (83,659) (3) %(277,397) (244,414) (12) %

Equity awards compensation expense 4,398 3,190 (27) %16,292 8,380 (49) %

Depreciation and Amortization expense 4,178 4,176 - %14,151 12,737 (10) %

Pension service costs 71 101 42 %214 291 36 %

Restructuring related and transformation costs ^(2)131 5,357 NM 2,196 6,793 NM

Non GAAP - Sales and Operations expenses (77,207) (70,835) (8) %(244,544) (216,213) (12) %

General and Administrative expenses (32,835) (28,672) (13) %(102,372) (83,772) (18) %

Equity awards compensation expense 4,142 280 (93) %12,293 6,314 (49) %

Depreciation and Amortization expense 1,768 1,143 (35) %5,413 3,751 (31) %

Pension service costs 129 185 43 %387 534 38 %

Acquisition related costs - 112 NM - 112 NM

Restructuring related and transformation costs ^(2)- 4,839 NM 429 5,320 NM

Non GAAP - General and Administrative expenses (26,796) (22,113) (17) %(83,850) (67,741) (19) %

Total Operating expenses (160,234) (143,285) (11) %(511,775) (427,902) (16) %

Equity awards compensation expense 11,770 6,803 (42) %40,043 22,465 (44) %

Depreciation and Amortization expense ^(1) 10,195 7,040 (31) %30,824 25,517 (17) %

Pension service costs 388 572 47 %1,173 1,649 41 %

Acquisition-related costs - 112 NM - 112 NM

Restructuring related and transformation costs ^(2)303 12,181 NM 2,921 15,606 NM

Total Non GAAP Operating expenses ^(3) $(137,578)$(116,577)(15) %$(436,814)$(362,553)(17) %

^ For the Nine Months Ended September 30, 2020, the Company recognized an(1) accelerated amortization for Manage technology due to a revised useful life in 2019 ($4.0 million in Research and development).

For the Three Months Ended and the Nine Months Ended September 2019, and^ September 2020, respectively, the Company recognized restructuring related(2) and transformation costs following its new organizational structure implemented to support its multi-product platform strategy and office right sizing policy.

Three Months Nine Months Ended Ended

September 30, September 30,

2019 2020 2019 2020

(Gain) from forfeitures of share-based compensation (606)- (3,284)- awards

Depreciation and amortization expense - - 1,228 -

Facilities and impairment related costs - 7,023 1,647 8,817

Payroll related costs 909 2,858 3,330 4,489

Consulting costs related to transformation - 2,300 - 2,300

Total restructuring related and transformation costs303 12,1812,921 15,606

For the Three Months Ended and the Nine Months Ended September 30, 2020, thecash outflows related to restructuring related and transformation costs were$6.2 million, and $13.0 million respectively, and were mainly compromised ofpayroll costs, broker fees and termination penalties related to facilities

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 related and transformation 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(3) 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 Nine Months Ended

September 30, September 30,

2019 2020 YoY 2019 2020 YoY Change Change

Equity awards compensation expense

Research and development $3,230$3,333 3 %$11,458$7,771 (32) %

Sales and operations 4,398 3,190 (27) %16,292 8,380 (49) %

General and administrative 4,142 280 (93) %12,293 6,314 (49) %

Total equity awards compensation expense 11,770 6,803 (42) %40,043 22,465 (44) %



Pension service costs

Research and development 188 286 52 %572 824 44 %

Sales and operations 71 101 42 %214 291 36 %

General and administrative 129 185 43 %387 534 38 %

Total pension service costs 388 572 47 %1,173 1,649 41 %



Depreciation and amortization expense

Cost of revenue 12,193 14,712 21 %32,175 40,581 26 %

Research and development ^(1) 4,249 1,721 (59) %11,260 9,029 (20) %

Sales and operations 4,178 4,176 - %14,151 12,737 (10) %

General and administrative 1,768 1,143 (35) %5,413 3,751 (31) %

Total depreciation and amortization expense 22,388 21,752 (3) %62,999 66,098 5 %



Acquisition-related costs

General and administrative - 112 NM - 112 NM

Total acquisition-related costs - 112 NM - 112 NM



Restructuring related and transformation costs ^(2)

Research and development 172 1,985 NM 296 3,493 NM

Sales and operations 131 5,357 NM 2,196 6,793 NM

General and administrative - 4,839 NM 429 5,320 NM

Total restructuring related and transformation costs$303 $12,181NM $2,921 $15,606NM

^ For the Nine Months Ended September 30, 2020, the Company recognized an(1) accelerated amortization for Manage technology due to a revised useful life in 2019 ($4.0 million in Research and development).

For the Three Months Ended and the Nine Months Ended September 2019, and^ September 2020, respectively, the Company recognized restructuring related(2) and transformation costs following its new organizational structure implemented to support its multi-product platform strategy and office right sizing policy:

Three Months Nine Months Ended Ended

September 30, September 30,

2019 2020 2019 2020

(Gain) from forfeitures of share-based compensation (606)- (3,284)- awards

Depreciation and amortization expense - - 1,228 -

Facilities and impairment related costs - 7,023 1,647 8,817

Payroll related costs 909 2,858 3,330 4,489

Consulting costs related to transformation - 2,300 - 2,300

Total restructuring related and transformation costs303 12,1812,921 15,606

For the Three Months Ended and the Nine Months Ended September 30, 2020, the cash outflows related to restructuring related and transformation costs were $6.2 million, and $13.0 million respectively, and were mainly compromised of payroll costs, broker fees and termination penalties related to facilities.

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 Nine Months Ended

September 30, September 30,

2019 2020 YoY 2019 2020 YoY Change Change



Net income $ 20,557 $ 5,293 (74) %$ 54,495 $ 27,871 (49) %

Adjustments:

Equity awards compensation expense 11,770 6,803 (42) %40,043 22,465 (44) %

Amortization of acquisition-related intangible assets ^(1)5,456 2,899 (47) %16,393 12,594 (23) %

Acquisition-related costs - 112 NM - 112 NM

Restructuring related and transformation costs ^(2) 303 12,181 NM 2,921 15,606 NM

Tax impact of the above adjustments (2,640) (2,986) 13 %(7,971) (5,611) (30) %

Total net adjustments 14,889 19,009 28 %51,386 45,166 (12) %

Adjusted net income ^(3) $ 35,446 $ 24,302 (31) %$ 105,881$ 73,037 (31) %



Weighted average shares outstanding

- Basic 64,868,54560,080,598 64,600,86961,059,345

- Diluted 66,067,04561,027,795 65,916,21961,644,827



Adjusted net income per share

- Basic $ 0.55 $ 0.40 (27) %$ 1.64 $ 1.20 (27) %

- Diluted $ 0.54 $ 0.40 (26) %$ 1.61 $ 1.18 (27) %

^ For the Nine Months Ended September 30, 2020, the Company recognized an(1) accelerated amortization for Manage technology due to a revised useful life in 2019 ($4.0 million in Research and development).

For the Three Months Ended and the Nine Months Ended September 2019, and^ September 2020, respectively, the Company recognized restructuring related(2) and transformation costs following its new organizational structure implemented to support its multi-product platform strategy and office right sizing policy:

Three Months Nine Months Ended Ended

September 30, September 30,

2019 2020 2019 2020

(Gain) from forfeitures of share-based compensation (606)- (3,284)- awards

Depreciation and amortization expense - - 1,228 -

Facilities and impairment related costs - 7,023 1,647 8,817

Payroll related costs 909 2,858 3,330 4,489

Consulting costs related to transformation - 2,300 - 2,300

Total restructuring related and transformation costs303 12,1812,921 15,606

For the Three Months Ended and the Nine Months Ended September 30, 2020, thecash outflows related to restructuring related and transformation costs were$6.2 million, and $13.0 million respectively, and were mainly compromised ofpayroll costs, broker fees and termination penalties related to facilities.

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 related and transformation 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 related and transformation costs and the tax^ impact of the foregoing adjustments in calculating Adjusted Net Income can(3) 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 Nine Months Ended

September 30, September 30,

2019 2020 YoY 2019 2020 YoY Change Change



Revenue as reported $522,606 $470,345 (10) %$1,608,876 $1,411,335 (12) %

Conversion impact U.S. dollar/other currencies (3,800) 11,732

Revenue at constant currency^(1) 522,606 466,545 (11) %1,608,876 1,423,067 (12) %



Traffic acquisition costs as reported (301,901) (284,401) (6) %(928,559) (839,463) (10) %

Conversion impact U.S. dollar/other currencies 2,183 (6,473)

Traffic Acquisition Costs at constant currency^(1)(301,901) (282,218) (7) %(928,559) (845,936) (9) %



Revenue ex-TAC as reported^(2) 220,705 185,944 (16) %680,317 571,872 (16) %

Conversion impact U.S. dollar/other currencies (1,617) 5,259

Revenue ex-TAC at constant currency^(2) 220,705 184,327 (16) %680,317 577,131 (15) %

Revenue ex-TAC^(2)/Revenue as reported 42 %40 % 42 %41 %



Other cost of revenue as reported (31,101) (34,608) 11 %(86,205) (102,328) 19 %

Conversion impact U.S. dollar/other currencies (303) (1,271)

Other cost of revenue at constant currency^(1) (31,101) (34,911) 12 %(86,205) (103,599) 20 %



Adjusted EBITDA^(3) 64,219 49,471 (23) %189,473 147,572 (22) %

Conversion impact U.S. dollar/other currencies (2,399) (182)

Adjusted EBITDA^(3) at constant currency^(1) $64,219 $47,072 (27) %$189,473 $147,390 (22) %

Adjusted EBITDA^(3)/Revenue ex-TAC^(2) 29 %27 % 28 %26 %

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(1) 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.

^ Revenue ex-TAC is not a measure calculated in accordance with U.S. GAAP.(2) See the table entitled "Reconciliation of Revenue ex-TAC by Region to Revenue by Region" for a reconciliation of Revenue Ex-TAC to revenue.

^ Adjusted EBITDA is not a measure calculated in accordance with U.S. GAAP.(3) 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)



Nine Months Ended

September 30,

2019 2020

Shares outstanding as at January 1, 64,249,084 62,293,508

Weighted average number of shares issued during 351,785 (1,234,163)the period

Basic number of shares - Basic EPS basis 64,600,869 61,059,345

Dilutive effect of share options, warrants, 1,315,350 585,482 employee warrants - Treasury method

Diluted number of shares - Diluted EPS basis 65,916,219 61,644,827



Shares issued as at September 30, before Treasury 66,173,983 66,083,172 stocks

Treasury stock as of September 30, (1,807,251)(5,989,258)

Shares outstanding as of September 30, after 64,366,732 60,093,914 Treasury stocks

Total dilutive effect of share options, warrants, 8,494,732 7,581,847 employee warrants

Fully diluted shares as at September 30, 72,861,464 67,675,761

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 Q3 YoY QoQ 2018 2018 2019 2019 2019 2019 2020 2020 2020 ChangeChange



Clients 19,213 19,419 19,373 19,733 19,971 20,247 20,360 20,359 20,565 3% 1%



Revenue 528,869 670,096 558,123 528,147 522,606 652,640 503,376 437,614 470,345 (10)% 7%

Americas 211,247 317,350 217,993 213,974 213,937 306,250 191,745 185,674 204,618 (4)% 10%

EMEA 195,230 220,904 209,643 194,359 185,556 216,639 190,114 159,621 167,800 (10)% 5%

APAC 122,392 131,842 130,487 119,814 123,113 129,751 121,517 92,319 97,927 (20)% 6%



TAC (305,387)(398,238)(322,429)(304,229)(301,901)(386,388)(297,364)(257,698)(284,401)(6)% 10%

Americas (126,406)(196,168)(131,545)(129,491)(129,047)(189,092)(120,022)(115,317)(130,756)1% 13%

EMEA (111,131)(128,053)(117,291)(107,401)(103,899)(124,939)(108,397)(90,153) (97,272) (6)% 8%

APAC (67,850) (74,017) (73,593) (67,337) (68,955) (72,357) (68,945) (52,228) (56,373) (18)% 8%



Revenue ex-TAC ^(1) 223,482 271,858 235,694 223,918 220,705 266,252 206,012 179,916 185,944 (16)% 3%

Americas 84,841 121,182 86,448 84,483 84,890 117,158 71,723 70,357 73,862 (13)% 5%

EMEA 84,099 92,851 92,352 86,958 81,657 91,700 81,717 69,468 70,528 (14)% 2%

APAC 54,542 57,825 56,894 52,477 54,158 57,394 52,572 40,091 41,554 (23)% 4%



Cash flow from operating 50,256 85,600 67,220 52,964 43,289 59,359 56,743 33,377 51,156 18% 53% activities



Capital expenditures 29,656 45,408 23,684 32,792 23,944 17,520 11,737 18,532 12,898 (46)% (30)%



Capital expenditures/Revenue6% 7% 4% 6% 5% 3% 2% 4% 3% N.A N.A



Net cash position 458,690 364,426 395,771 422,053 409,178 418,763 436,506 578,181 626,744 53% 8%



Headcount 2,737 2,744 2,813 2,873 2,794 2,755 2,701 2,685 2,636 (6)% (2)%



Days Sales Outstanding (days - 60 58 59 58 57 52 62 61 62 N.A N.A end of month)

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(1) 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.

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SOURCE Criteo S.A.