PR Newswire | Jul 29, 2020 07:01AM EDT

07/29 06:00 CDT

Criteo Reports Results for the Second Quarter 2020 NEW YORK, July 29, 2020

NEW YORK, July 29, 2020 /PRNewswire/ -- Criteo S.A. (NASDAQ: CRTO), the global technology company powering the world's marketers with trusted and impactful advertising, today announced better than expected financial results for the second quarter ended June 30, 2020 in a still challenging global environment marked by the COVID-19 pandemic.

* Revenue declined 17% year-over-year, or 16% at constant currency1, to $438 million, after an estimated $100 million net negative COVID-19 impact, or 19 points of year-over-year growth at constant currency. * Revenue excluding Traffic Acquisition Costs, or Revenue ex-TAC2, decreased 20% year-over-year, or 18% at constant currency, to $180 million ($178 million at guidance rates), representing 41% of revenue. The estimated net negative impact of COVID-19 on Revenue ex-TAC was approximately $41 million, or 19 points of year-over-year growth at constant currency. * Net income decreased 51% year-over-year to $6 million, representing 1% of revenue. * Adjusted EBITDA2 declined 30% at constant currency to $39 million, representing 22% of Revenue ex-TAC. * Diluted EPS decreased 44% to $0.09 and Adjusted diluted EPS2 decreased 43% to $0.27. * Cash flow from operating activities was $33 million. * Free Cash Flow2 was solid in the current economic context at $15 million. * Our cash position was $578 million as of June 30, 2020, up $159 million compared to Dec. 31, 2019. * The Company had financial liquidity in excess of $830 million as of June 30, 2020.

"I'm pleased with our better-than-expected performance and strong additions to our leadership," said Megan Clarken, CEO. "The team is fully energized and focused on executing on our strategic plan."

"Q2 was a solid quarter delivered in a still uncertain context," said Dave Anderson, Interim CFO. "We remain hyper-focused on managing responsibly our expense base while also investing for growth."

Operating Highlights

* New solutions, which include all solutions outside of retargeting, grew 67% year-over-year to 20% of total Revenue ex-TAC, doubling year-over-year and adding 7 points of Revenue ex-TAC contribution in Q2. * Todd Parsons will soon be joining Criteo from OpenX as the Company's new Chief Product Officer. * Retail Media's strong growth momentum accelerated to +84% year-over-year compared to +41% in Q1. * We hired Sherry Smith, the prior CEO of Triad Retail Media, as MD of Americas for Retail Media. * We enhanced our SPARROW proposal for cohort-based advertising to improve Google Chrome's TURTLEDOV initiative as part of our online identity resolution strategy. * Client count grew 3% year-over-year to close to 20,400, in line with Q1 2020. * Same-client revenue declined 13% year-over-year and same-client Revenue ex-TAC3 decreased 14% year-over-year at constant currency, including 21 points directly attributable to the COVID-19 disruption on both a revenue and Revenue ex-TAC basis. * Our direct header-bidding technology now connects to over 4,700 publishers across Web and App.

^___________________________________________________

^Constant currency measures exclude the impact of foreign currency 1fluctuations and is computed by applying the 2019 average exchange rates for the relevant period to 2020 figures.

Revenue ex-TAC, Revenue ex-TAC margin, Adjusted EBITDA, Adjusted EBITDA at ^constant currency, Adjusted EBITDA margin, Adjusted diluted EPS, Free Cash 2Flow 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-TAC 3generated by clients that were live with us in a given quarter and still live with us the same quarter in the following year.

Revenue and Revenue ex-TAC

Revenue declined 17% year-over-year, or 16% at constant currency, to $438 million (Q2 2019: $528 million), after an approximately $100 million net negative business impact from the COVID-19 disruption, or approximately 19 points of the year-over-over decline at constant currency. Revenue ex-TAC decreased 20% year-over-year, or 18% at constant currency, to $180 million (Q2 2019: $224 million), after an approximately $41 million net negative business impact from the COVID-19 disruption, or approximately 19 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 disruption. Revenue ex-TAC as a percentage of revenue, or Revenue ex-TAC margin, was 41% (Q2 2019: 42%).

* In the Americas, Revenue declined 13% year-over-year, or 12% at constant currency, to $186 million and represented 42% of total Revenue. Revenue ex-TAC declined 17% year-over-year, or 15% at constant currency, to $70 million and represented 39% of total Revenue ex-TAC. * In EMEA, Revenue declined 18% year-over-year, or 16% at constant currency, to $160 million and represented 37% of total Revenue. Revenue ex-TAC declined 20% year-over-year, or 18% at constant currency, to $69 million and represented 39% of total Revenue ex-TAC. * In Asia-Pacific, Revenue declined 23% year-over-year, or $23 at constant currency, to $92 million and represented 21% of total Revenue. Revenue ex-TAC declined 24% year-over-year, or 24% at constant currency, to $40 million and represented 22% of total Revenue ex-TAC.

Net Income and Adjusted Net Income

Net income decreased 51% year-over-year to $6 million (Q2 2019: $13 million). Net income margin as a percentage of revenue was 1% (Q2 2019: 2%). Net income available to shareholders of Criteo S.A. decreased 47% year-over-year to $6 million, or $0.09 per share on a diluted basis (Q2 2019: $11 million, or $0.16 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, decreased 46% year-over-year to $17 million, or $0.27 per share on a diluted basis (Q2 2019: $31 million, or $0.47 per share on a diluted basis).

Adjusted EBITDA and Operating Expenses

Adjusted EBITDA decreased 31% year-over-year, or 30% at constant currency, to $39 million (Q2 2019: $56 million), driven by the Revenue ex-TAC performance over the period, including the still meaningful impact of the COVID-19 pandemic, partly offset by proactive and disciplined expense management. Adjusted EBITDA as a percentage of Revenue ex-TAC, or Adjusted EBITDA margin, was 22% (Q2 2019: 25%).

Operating expenses decreased 22% or $39 million, to $136 million (Q2 2019: $175 million), mostly driven by lower headcount-related expense and disciplined expense management. 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 20% or $29 million, to $120 million (Q2 2019: $149 million), mostly driven by lower headcount-related expense and disciplined expense management.

Since the outbreak of COVID-19, the Company has been focused on managing its expense base in a swift, agile and disciplined way to maximize profitability and preserve cash generation for 2020 and beyond.

Cash Flow, Cash and Financial Liquidity Position

Cash flow from operating activities decreased 37% year-over-year to $33 million (Q2 2019: $53 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, was solid in the current circumstances at $15 million (Q2 2019: $20 million), representing 61% of Adjusted EBITDA in the first half 2020 (H1 2019: 51%), despite $4 million cash restructuring charges.

Cash and cash equivalents increased $159 million compared to December 31, 2019 to $578 million, after spending $15 million on share repurchases in the quarter and preemptively drawing $157 million on the Company's (euro)350 million Revolving Credit Facility (RCF).

The Company has financial liquidity in excess of $830 million, including its RCF and cash position as of June 30, 2020. We believe that the Company's current financial liquidity, combined with expected cash-flow generation in 2020, puts it in a solid position to weather the COVID-19 crisis.

Business Outlook

The following forward-looking statements reflect Criteo's expectations as of July 29, 2020.

Third quarter 2020 guidance:

* We expect Revenue ex-TAC to be between $171 million and $173 million, implying constant-currency decline of approximately 20% to 21%. * Due to the expected and still meaningful impact of COVID-19 on our business in the third quarter, we expect Adjusted EBITDA to be between $31 million and $33 million.

We withdrew our financial guidance for fiscal year 2020 on April 1, 2020. Given how uncertain the global situation still is around the consequences of the COVID-19 pandemic and the still multiple unknowns at this point, we believe the Company is still not in a position to reliably quantify the impact of COVID-19 on its financial results beyond the third quarter 2020.

The above guidance for the third quarter ending September 30, 2020, assumes the following exchange rates for the main currencies impacting our business: a U.S. dollar-euro rate of 0.905, a U.S. dollar-Japanese Yen rate of 108, a U.S. dollar-British pound rate of 0.80, a U.S. dollar-Korean Won rate of 1220 and a U.S. dollar-Brazilian real rate of 5.24.

The above guidance assumes no acquisitions are completed during the third quarter ending September 30, 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 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 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 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 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 September 30, 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 recent outbreak of COVID-19 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 earnings conference call will take place today, July 29, 2020, at 8:00AM EDT, 2:00PM 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. 2,700 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, VP, Head of Investor and Analyst Relations, e.lassalle@criteo.comFriederike Edelmann, Director, Investor Relations, f.edelmann@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, 2019June 30, 2020

Assets

Current assets:

Cash and cash equivalents $ 418,763 $578,181

Trade receivables, net of allowances of $16.1 million and $33.3 million at December 481,732 329,979 31, 2019 and June 30, 2020, respectively

Income taxes 21,817 19,932

Other taxes 60,924 54,008

Other current assets 17,225 17,306

Total current assets 1,000,461 999,406

Property, plant and equipment, net 194,161 195,736

Intangible assets, net 86,886 78,185

Goodwill 317,100 316,575

Right of Use Asset - operating lease 142,044 137,808

Marketable securities - 22,396

Non-current financial assets 21,747 19,809

Deferred tax assets 27,985 34,487

Total non-current assets 789,923 804,996

Total assets $ 1,790,384 $1,804,402



Liabilities and shareholders' equity

Current liabilities:

Trade payables $ 390,277 $280,626

Contingencies 6,385 4,126

Income taxes 3,422 2,440

Financial liabilities - current portion 3,636 159,381

Lease liability - operating - current 45,853 51,414 portion

Other taxes 50,099 44,085

Employee - related payables 74,781 61,963

Other current liabilities 35,886 38,982

Total current liabilities 610,339 643,017

Deferred tax liabilities 9,272 8,079

Retirement benefit obligation 8,485 9,215

Financial liabilities - non-current portion 769 44

Lease liability - operating - non-current 117,988 105,794 portion

Other non-current liabilities 5,543 3,256

Total non-current liabilities 142,057 126,388

Total liabilities 752,396 769,405

Commitments and contingencies

Shareholders' equity:

Common shares, (eu)0.025 par value, 66,197,181 and 66,204,881 shares authorized,2,158 2,158 issued and outstanding at December 31, 2019 and June 30, 2020, respectively.

Treasury stock, 3,903,673 and 5,589,408 shares at cost as of December 31, 2019 and (74,900) (90,714) June 30, 2020, respectively.

Additional paid-in capital 668,389 683,288

Accumulated other comprehensive loss (40,105) (44,297)

Retained earnings 451,725 452,247

Equity - attributable to shareholders of 1,007,267 1,002,682 Criteo S.A.

Non-controlling interests 30,721 32,315

Total equity 1,037,988 1,034,997

Total equity and liabilities $ 1,790,384 $1,804,402

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,

2019 2020 YoY 2019 2020 YoY Change Change



Revenue $528,147 $437,614 (17)%$1,086,270$940,990 (13)%



Cost of revenue

Traffic acquisition cost (304,229) (257,698) (15)%(626,658) (555,062) (11)%

Other cost of revenue (29,059) (33,914) 17 %(55,104) (67,720) 23 %



Gross profit 194,859 146,002 (25)%404,508 318,208 (21)%



Operating expenses:

Research and development expenses (44,015) (31,247) (29)%(90,592) (68,762) (24)%

Sales and operations expenses (95,503) (75,781) (21)%(191,412) (160,755) (16)%

General and administrative expenses (35,767) (29,185) (18)%(69,537) (55,100) (21)%

Total Operating expenses (175,285) (136,213) (22)%(351,541) (284,617) (19)%

Income from operations 19,574 9,789 (50)%52,967 33,591 (37)%

Financial income (expense) (1,354) (1,003) (26)%(3,328) (1,337) (60)%

Income before taxes 18,220 8,786 (52)%49,639 32,254 (35)%

Provision for income taxes (5,683) (2,636) (54)%(15,701) (9,676) (38)%

Net Income $12,537 $6,150 (51)%$33,938 $22,578 (33)%



Net income available to shareholders$10,823 $5,716 (47)%$29,943 $21,175 (29)%of Criteo S.A.

Net income available to $1,714 $434 (75)%$3,995 $1,403 (65)%non-controlling interests



Weighted average shares outstanding used in computing per share amounts:

Basic 64,581,47661,415,467 64,459,867 61,553,875

Diluted 65,624,50561,790,135 65,833,642 61,958,499



Net income allocated to shareholders per share:

Basic $0.17 $0.09 (47)%$0.46 $0.34 (26)%

Diluted $0.16 $0.09 (44)%$0.45 $0.34 (24)%

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



Three Months Ended Six Months Ended

June 30, June 30,

2019 2020 YoY 2019 2020 YoY Change Change

Net income $12,537 $6,150 (51) %$33,938 $22,578 (33) %

Non-cash and non-operating items 28,961 33,083 14 %53,959 65,911 22 %

- Amortization and provisions 18,282 27,907 53 %37,926 54,951 45 %

- Equity awards compensation expense ^(1) 11,713 7,160 (39) %25,595 15,662 (39) %

- Net gain or loss on disposal of - (123) NM - 2,143 NM non-current assets

- Change in deferred taxes 7,252 (4,939) NM 1,336 (7,617) NM

- Change in income taxes (8,696) 3,056 NM (10,630) 727 NM

- Other 410 22 (95) %(268) 45 NM

Changes in working capital related to operating 11,466 (5,856) NM 32,287 1,631 (95) %activities

- Decrease in trade receivables 19,325 27,318 41 %105,343 126,706 20 %

- (Decrease) in trade payables (14,995) (22,118) 48 %(73,480) (103,797) 41 %

- Decrease in other current assets 7,504 15,448 NM 1,512 5,050 NM

- Increase/(Decrease) in other current 3,015 (25,503) NM 5,451 (26,448) NM liabilities

- Change in operating lease liabilities (3,383) (1,001) (70) %(6,539) 120 NM and right of use assets

CASH FROM OPERATING ACTIVITIES 52,964 33,377 (37) %120,184 90,120 (25) %

Acquisition of intangible assets, property, plant and(28,812) (29,471) 2 %(42,104) (40,729) (3) %equipment

Change in accounts payable related to intangible (3,980) 10,939 NM (14,372) 10,460 NM assets, property, plant and equipment

(Payment for) disposal of a business, net of cash 637 - (100)%(4,688) - (100)%acquired (disposed)

Change in other non-current financial assets (1,152) (21,238) NM (1,184) (20,349) NM

CASH USED FOR INVESTING ACTIVITIES (33,307) (39,770) 19 %(62,348) (50,618) (19) %

Proceeds from borrowings under line-of-credit - 154,310 NM - 154,310 NM agreement

Repayment of borrowings (167) 1 NM (339) (169) (50) %

Proceeds from capital increase (98) (20) (80) %(87) (16) (82) %

Repurchase of treasury stocks - (14,860) NM - (33,101) NM

Change in other financial liabilities (209) (573) NM (239) (927) NM

CASH (USED FOR) FROM FINANCING ACTIVITIES (474) 138,858 NM (665) 120,097 NM

Effect of exchange rates changes on cash and cash 7,099 9,210 30 %456 (181) NM equivalents

Net increase in cash and cash equivalents 26,282 141,675 NM 57,627 159,418 NM

Net cash and cash equivalents at beginning of period 395,771 436,506 10 %364,426 418,763 15 %

Net cash and cash equivalents at end of period $422,053$578,18137 %$422,053 $578,181 37 %



SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid for taxes, net of refunds $(7,127)$(4,519)(37) %$(24,995)$(16,566)(34) %

Cash paid for interest, net of amounts capitalized $(351) $(317) (10) %$(758) $(666) (12) %

Share-based compensation expense according to ASC 718 Compensation - ^ stock compensation accounted for $11.4 million and $6.8 million of equity(1)awards compensation expense for the quarter ended June 30, 2019 and 2020, respectively, and $24.9 million and $14.9 million of equity awards compensation for the six months ended June 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 Six Months Ended

June 30, June 30,

2019 2020 YoY 2019 2020 YoY Change Change



CASH FROM OPERATING ACTIVITIES$52,964$33,377(37)%$120,184$90,120(25)%

Acquisition of intangible assets, property, plant and (28,812)(29,471)2 %(42,104) (40,729)(3) %equipment

Change in accounts payable related to intangible assets, (3,980) 10,939 NM (14,372) 10,460 NM property, plant and equipment

FREE CASH FLOW ^(1) $20,172$14,845(26)%$63,708 $59,851(6) %

^ 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 Six Months Ended

June 30, June 30,

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

Revenue

Americas $213,974$185,674(13)%(12) %$431,967$377,419(13)%(11) %

EMEA 194,359 159,621 (18)%(16) %404,002 349,735 (13)%(11) %

Asia-Pacific 119,814 92,319 (23)%(23) %250,301 213,836 (15)%(14) %

Total 528,147 437,614 (17)%(16) %1,086,270940,990 (13)%(12) %



Traffic acquisition costs

Americas (129,491)(115,317)(11)%(10) %(261,036)(235,339)(10)%(9) %

EMEA (107,401)(90,153) (16)%(14) %(224,692)(198,550)(12)%(9) %

Asia-Pacific (67,337) (52,228) (22)%(23) %(140,930)(121,173)(14)%(14) %

Total (304,229)(257,698)(15)%(14) %(626,658)(555,062)(11)%(10) %



Revenue ex-TAC ^(1)

Americas 84,483 70,357 (17)%(15) %170,931 142,080 (17)%(16) %

EMEA 86,958 69,468 (20)%(18) %179,310 151,185 (16)%(13) %

Asia-Pacific 52,477 40,091 (24)%(24) %109,371 92,663 (15)%(15) %

Total $223,918$179,916(20)%(18) %$459,612$385,928(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 (1)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, June 30,

2019 2020 YoY 2019 2020 YoY Change Change

Net income $12,537$6,150 (51) %$33,938 $22,578(33) %

Adjustments:

Financial (income) expense 1,354 1,003 (26) %3,328 1,337 (60) %

Provision for income taxes 5,683 2,636 (54) %15,701 9,676 (38) %

Equity awards compensation 14,391 7,159 (50) %28,273 15,662 (45) %expense

Research and development 4,203 2,068 (51) %8,228 4,438 (46) %

Sales and operations 5,693 1,572 (72) %11,894 5,190 (56) %

General and administrative 4,495 3,519 (22) %8,151 6,034 (26) %

Pension service costs 391 539 38 %785 1,077 37 %

Research and development 191 269 41 %384 538 40 %

Sales and operations 71 95 34 %143 190 33 %

General and administrative 129 175 36 %258 349 35 %

Depreciation and amortization 21,315 20,208 (5) %40,611 44,346 9 %expense

Cost of revenue 10,847 13,098 21 %19,982 25,869 29 %

Research and development ^(1)3,534 1,658 (53) %7,011 7,308 4 %

Sales and operations 5,109 4,221 (17) %9,973 8,561 (14) %

General and administrative 1,825 1,231 (33) %3,645 2,608 (28) %

Restructuring cost ^(2) 728 1,216 67 %2,618 3,425 31 %

Research and development 124 513 NM 124 1,508 NM

Sales and operations 175 415 NM 2,065 1,436 (30) %

General and administrative 429 288 (33) %429 481 12 %

Total net adjustments 43,862 32,761 (25) %91,316 75,523 (17) %

Adjusted EBITDA ^(3) $56,399$38,911(31) %$125,254$98,101(22) %

^ For the Six Months Ended June 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 Six Months Ended June 2019, and June ^ 2020, respectively, the Company recognized restructuring charges (2)following its new organizational structure implemented to support its multi-product platform strategy and office right sizing policy:

Three Months EndedSix Months Ended

June 30, June 30,

2019 2020 2019 2020

Equity awards compensation expense (2,678) - (2,678)-

Depreciation and amortization expense 1,228 - 1,228 -

Facilities and impairment related costs(243) 807 1,647 1,794

Payroll related costs 2,421 409 2,421 1,631

Total restructuring costs 728 1,216 2,618 3,425

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 (3)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, June 30,

2019 2020 YoY 2019 2020 YoY Change Change

Research and Development expenses $(44,015) $(31,247) (29) %$(90,592) $(68,762) (24) %

Equity awards compensation expense 4,203 2,068 (51) %8,228 4,438 (46) %

Depreciation and Amortization expense ^(1) 3,534 1,658 (53) %7,011 7,308 4 %

Pension service costs 191 269 41 %384 538 40 %

Restructuring costs ^(2) 124 513 NM 124 1,508 NM

Non GAAP - Research and Development expenses(35,963) (26,739) (26) %(74,845) (54,970) (27) %

Sales and Operations expenses (95,503) (75,781) (21) %(191,412) (160,755) (16) %

Equity awards compensation expense 5,693 1,572 (72) %11,894 5,190 (56) %

Depreciation and Amortization expense 5,109 4,221 (17) %9,973 8,561 (14) %

Pension service costs 71 95 34 %143 190 33 %

Restructuring costs ^(2) 175 415 NM 2,065 1,436 (30) %

Non GAAP - Sales and Operations expenses (84,455) (69,478) (18) %(167,337) (145,378) (13) %

General and Administrative expenses (35,767) (29,185) (18) %(69,537) (55,100) (21) %

Equity awards compensation expense 4,495 3,519 (22) %8,151 6,034 (26) %

Depreciation and Amortization expense 1,825 1,231 (33) %3,645 2,608 (28) %

Pension service costs 129 175 36 %258 349 35 %

Restructuring costs ^(2) 429 288 (33) %429 481 12 %

Non GAAP - General and Administrative (28,889) (23,972) (17) %(57,054) (45,628) (20) %expenses

Total Operating expenses (175,285) (136,213) (22) %(351,541) (284,617) (19) %

Equity awards compensation expense 14,391 7,159 (50) %28,273 15,662 (45) %

Depreciation and Amortization expense ^(1) 10,468 7,110 (32) %20,629 18,477 (10) %

Pension service costs 391 539 38 %785 1,077 37 %

Restructuring costs ^(2) 728 1,216 67 %2,618 3,425 31 %

Total Non GAAP Operating expenses ^(3) $(149,307)$(120,189)(20) %$(299,236)$(245,976)(18) %

^ For the Six Months Ended June 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 Six Months Ended June 2019, and June ^ 2020, respectively, the Company recognized restructuring charges (2)following its new organizational structure implemented to support its multi-product platform strategy and office right sizing policy:

Three Months EndedSix Months Ended

June 30, June 30,

2019 2020 2019 2020

Equity awards compensation expense (2,678) - (2,678)-

Depreciation and amortization expense 1,228 - 1,228 -

Facilities and impairment related costs(243) 807 1,647 1,794

Payroll related costs 2,421 409 2,421 1,631

Total restructuring costs 728 1,216 2,618 3,425

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 (3)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, June 30,

2019 2020 YoY 2019 2020 YoY Change Change

Equity awards compensation expense

Research and development $4,203$2,068(51) %$8,228$4,438(46) %

Sales and operations 5,693 1,572 (72) %11,894 5,190 (56) %

General and administrative 4,495 3,519 (22) %8,151 6,034 (26) %

Total equity awards compensation expense 14,391 7,159 (50) %28,273 15,662 (45) %



Pension service costs

Research and development 191 269 41 %384 538 40 %

Sales and operations 71 95 34 %143 190 33 %

General and administrative 129 175 36 %258 349 35 %

Total pension service costs 391 539 38 %785 1,077 37 %



Depreciation and amortization expense

Cost of revenue 10,847 13,098 21 %19,982 25,869 29 %

Research and development ^(1) 3,534 1,658 (53) %7,011 7,308 4 %

Sales and operations 5,109 4,221 (17) %9,973 8,561 (14) %

General and administrative 1,825 1,231 (33) %3,645 2,608 (28) %

Total depreciation and amortization expense21,315 20,208 (5) %40,611 44,346 9 %



Restructuring costs ^(2)

Research and development 124 513 NM 124 1,508 NM

Sales and operations 175 415 NM 2,065 1,436 (30) %

General and administrative 429 288 (33) %429 481 12 %

Total restructuring costs $728 $1,21667 %$2,618$3,42531 %

^ For the Six Months Ended June 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 Six Months Ended June 2019, and June ^ 2020, respectively, the Company recognized restructuring charges (2)following its new organizational structure implemented to support its multi-product platform strategy and office right sizing policy:

Three Months EndedSix Months Ended

June 30, June 30,

2019 2020 2019 2020

Equity awards compensation expense (2,678) - (2,678)-

Depreciation and amortization expense 1,228 - 1,228 -

Facilities and impairment related costs(243) 807 1,647 1,794

Payroll related costs 2,421 409 2,421 1,631

Total restructuring costs 728 1,216 2,618 3,425

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, June 30,

2019 2020 YoY 2019 2020 YoY Change Change



Net income $12,537 $6,150 (51) %$33,938 $22,578 (33) %

Adjustments:

Equity awards compensation expense 14,391 7,159 (50) %28,273 15,662 (45) %

Amortization of acquisition-related5,465 2,847 (48) %10,937 9,695 (11) %intangible assets ^(1)

Restructuring costs ^(2) 728 1,216 67 %2,618 3,425 31 %

Tax impact of the above adjustments(2,391) (665) (72) %(5,331) (2,625) (51) %

Total net adjustments 18,193 10,557 (42) %36,497 26,157 (28) %

Adjusted net income ^(3) $30,730 $16,707 (46) %$70,435 $48,735 (31) %



Weighted average shares outstanding

- Basic 64,581,47661,415,467 64,459,86761,553,875

- Diluted 65,624,50561,790,135 65,833,64261,958,499



Adjusted net income per share

- Basic $0.48 $0.27 (44) %$1.09 $0.79 (28) %

- Diluted $0.47 $0.27 (43) %$1.07 $0.79 (26) %

^ For the Six Months Ended June 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 Six Months Ended June 2019, and June ^ 2020, respectively, the Company recognized restructuring charges (2)following its new organizational structure implemented to support its multi-product platform strategy and office right sizing policy:

Three Months EndedSix Months Ended

June 30, June 30,

2019 2020 2019 2020

Equity awards compensation expense (2,678) - (2,678)-

Depreciation and amortization expense 1,228 - 1,228 -

Facilities and impairment related costs(243) 807 1,647 1,794

Payroll related costs 2,421 409 2,421 1,631

Total restructuring costs 728 1,216 2,618 3,425

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 (3)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,

2019 2020 YoY 2019 2020 YoY Change Change



Revenue as reported $528,147 $437,614 (17) %$1,086,270 $940,990 (13) %

Conversion impact U.S. dollar/other 7,414 15,532 currencies

Revenue at constant currency^(1) 528,147 445,028 (16) %1,086,270 956,522 (12) %



Traffic acquisition costs as reported (304,229) (257,698) (15) %(626,658) (555,062) (11) %

Conversion impact U.S. dollar/other (4,131) (8,656) currencies

Traffic Acquisition Costs at constant (304,229) (261,829) (14) %(626,658) (563,718) (10) %currency^(1)



Revenue ex-TAC as reported^(2) 223,918 179,916 (20) %459,612 385,928 (16) %

Conversion impact U.S. dollar/other 3,283 6,876 currencies

Revenue ex-TAC at constant currency^(2)223,918 183,199 (18) %459,612 392,804 (15) %

Revenue ex-TAC^(2)/Revenue as reported 42.4 %41.1 % 42.3 %41.0 %



Other cost of revenue as reported (29,059) (33,914) 17 %(55,104) (67,720) 23 %

Conversion impact U.S. dollar/other (544) (968) currencies

Other cost of revenue at constant (29,059) (34,458) 19 %(55,104) (68,688) 25 %currency^(1)



Adjusted EBITDA^(3) 56,399 38,911 (31) %125,254 98,101 (22) %

Conversion impact U.S. dollar/other 600 2,217 currencies

Adjusted EBITDA^(3) at constant $56,399 $39,511 (30) %$125,254 $100,318 (20) %currency^(1)

Adjusted EBITDA^(3)/Revenue ex-TAC^(2) 25.2 %21.6 % 27.3 %25.4 %

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 (1)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.



^ 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)



Six Months Ended

June 30,

2019 2020

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

Weighted average number of shares issued during 210,783 (739,633) the period

Basic number of shares - Basic EPS basis 64,459,867 61,553,875

Dilutive effect of share options, warrants, 1,373,775 404,624 employee warrants - Treasury method

Diluted number of shares - Diluted EPS basis 65,833,642 61,958,499



Shares issued as at June 30, before Treasury 66,161,523 66,204,881 stocks

Treasury stock as of June 30, (1,118,969)(5,589,408)

Shares outstanding as of June 30, after Treasury 65,042,554 60,615,473 stocks

Total dilutive effect of share options, warrants, 7,458,330 8,341,925 employee warrants

Fully diluted shares as at June 30, 72,500,884 68,957,398

CRITEO S.A. Supplemental Financial Information and Operating Metrics (U.S. dollars in thousands except where stated, unaudited)



Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 YoY QoQ 2018 2018 2018 2019 2019 2019 2019 2020 2020 ChangeChange



Clients 18,936 19,213 19,419 19,373 19,733 19,971 20,247 20,360 20,359 3% -%



Revenue 537,185 528,869 670,096 558,123 528,147 522,606 652,640 503,376 437,614 (17)% (13)%

Americas 212,781 211,247 317,350 217,993 213,974 213,937 306,250 191,745 185,674 (13)% (3)%

EMEA 201,080 195,230 220,904 209,643 194,359 185,556 216,639 190,114 159,621 (18)% (16)%

APAC 123,324 122,392 131,842 130,487 119,814 123,113 129,751 121,517 92,319 (23)% (24)%



TAC (306,963)(305,387)(398,238)(322,429)(304,229)(301,901)(386,388)(297,364)(257,698)(15)% (13)%

Americas (125,502)(126,406)(196,168)(131,545)(129,491)(129,047)(189,092)(120,022)(115,317)(11)% (4)%

EMEA (112,577)(111,131)(128,053)(117,291)(107,401)(103,899)(124,939)(108,397)(90,153) (16)% (17)%

APAC (68,884) (67,850) (74,017) (73,593) (67,337) (68,955) (72,357) (68,945) (52,228) (22)% (24)%



Revenue ex-TAC ^(1)230,222 223,482 271,858 235,694 223,918 220,705 266,252 206,012 179,916 (20)% (13)%

Americas 87,279 84,841 121,182 86,448 84,483 84,890 117,158 71,723 70,357 (17)% (2)%

EMEA 88,503 84,099 92,851 92,352 86,958 81,657 91,700 81,717 69,468 (20)% (15)%

APAC 54,440 54,542 57,825 56,894 52,477 54,158 57,394 52,572 40,091 (24)% (24)%



Cash flow from operating 40,341 50,256 85,600 67,220 52,964 43,289 59,359 56,743 33,377 (37)% (41)% activities



Capital 17,847 29,656 45,408 23,684 32,792 23,944 17,520 11,737 18,532 (43)% 58% expenditures



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



Net cash position 480,285 458,690 364,426 395,771 422,053 409,178 418,763 436,506 578,181 37% 32%



Headcount 2,678 2,737 2,744 2,813 2,873 2,794 2,755 2,701 2,685 (7)% (1)%



Days Sales Outstanding (days -61 60 58 59 58 57 52 62 61 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 (1)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.

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SOURCE Criteo S.A.