• Revenue: $1.9 billion for 2024.
• Contribution ex-TAC: $1.1 billion, up 11% at constant currency.
• Retail Media Revenue: $258 million, with contribution ex-TAC up 25% year-over-year at constant currency.
• Performance Media Revenue: $1.7 billion, with contribution ex-TAC up 8% at constant currency.
• Adjusted EBITDA Margin: 35%, up 500 basis points year-over-year.
• Free Cash Flow: $182 million, up 65% year-over-year.
• Adjusted Net Income: $268 million, up 40% year-over-year.
• Adjusted EPS: $4.57, up 44% in 2024.
• Q4 Revenue: $553 million.
• Q4 Contribution ex-TAC: $334 million, up 7% at constant currency.
• Q4 Adjusted EBITDA: $144 million.
• Q4 Net Income: $72 million, up 16% year-over-year.
• Q4 Adjusted Diluted EPS: $1.75, up 15% year-over-year.
• Total Liquidity: $782 million as of December 2024.
• Share Repurchases: $225 million deployed in 2024.
• 2025 Contribution ex-TAC Growth Expectation: Mid-single digits at constant currency.
• 2025 Adjusted EBITDA Margin Expectation: Approximately 33% to 34%.

• Warning! GuruFocus has detected 4 Warning Signs with CRTO.

Release Date: February 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Criteo SA (NASDAQ:CRTO) reported double-digit growth for the third consecutive year, with a significant expansion in adjusted EBITDA margin.
• The retail media business exceeded $250 million in revenue, marking a 31% year-over-year growth in media spend.
• Criteo SA (NASDAQ:CRTO) has secured significant new retailer partnerships worldwide, including a strategic collaboration with Microsoft Advertising.
• The company has successfully expanded its agency relationships, with agency business growth outpacing the rest of the business in 2024.
• Criteo SA (NASDAQ:CRTO) delivered strong free cash flow of $182 million, up 65% year-over-year, demonstrating robust financial health.

Negative Points

• Criteo SA (NASDAQ:CRTO) faces challenges from the competitive landscape, including potential competition from Amazon's retail ad services.
• The company experienced a slower start to the fourth quarter, with retargeting only returning to growth in December.
• Adtech services revenue was down 4%, reflecting challenges with reduced spending by a major adtech client.
• Foreign currency fluctuations posed a headwind, impacting revenue and contribution ex-TAC.
• The company anticipates a negative year-over-year impact from foreign exchange changes on contribution ex-TAC for the full year 2025.

Q & A Highlights

Q: What were the surprises in Q4 regarding retail media strength, and how should we think about gross media take rates and drivers for next year? A: Megan Clarken, CEO, highlighted that Criteo is well-positioned in the retail media space, having built a strong client base and competitive edge over the years. Todd Parsons, Chief Product Officer, added that their agency and brand relationships are growing, contributing to increased media spend. Sarah Glickman, CFO, noted that Q4 saw exceptional performance, with significant media spend and higher fees from annual volume thresholds, setting a strong foundation for 2025.

Q: Were there any specific onetime factors in Q4 that contributed to the margin outperformance, and how do you view margin opportunities for next year? A: Sarah Glickman, CFO, explained that Q4 margin outperformance was driven by topline growth, operational leverage, favorable foreign exchange rates, and lower people costs due to hiring timing. For 2025, they anticipate continued margin strength, even with planned investments, and expect adjusted EBITDA margins of 33% to 34%.

Q: How does Criteo view Amazon's retail ad service as a competitor, and what actions have been taken regarding the bid switch headwinds in Q4? A: Megan Clarken, CEO, stated that Amazon's service targets a different market segment and that Criteo's clients prefer their neutral position. Todd Parsons, Chief Product Officer, emphasized Criteo's comprehensive and neutral product suite. Sarah Glickman, CFO, mentioned that actions have been taken to mitigate bid switch headwinds, improving the business outlook for 2025.

Q: What portion of the 2025 budget is covered by contracts, and how does visibility compare to previous years? A: Megan Clarken, CEO, described a rigorous financial planning process that includes client contracts and growth opportunities. Sarah Glickman, CFO, added that the plan is detailed and based on client growth expectations, with a focus on execution and potential upside from new capabilities and partnerships.

Q: Can you provide insights into the potential upside in guidance and the impact of retail media off-site campaigns? A: Sarah Glickman, CFO, noted that strategic initiatives across the business could drive upside, with a focus on new capabilities and partnerships. Todd Parsons, Chief Product Officer, explained that off-site campaigns are part of a holistic approach to meet retailer and brand needs, with growth dependent on retailer maturity and packaging of offerings.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.