News

NEW YORK, Feb. 10, 2016 /PRNewswire/ -- Criteo S.A. (NASDAQ: CRTO), the performance marketing technology company, today announced financial results for the fourth quarter and fiscal year ended December 31, 2015¹.

• Revenue for the fourth quarter 2015 increased 55% year-over-year (or 46% at constant currency²) to €362 million.
  Revenue for fiscal year 2015 increased 60% year-over-year (or 50% at constant currency) to €1,193 million.
• Revenue excluding Traffic Acquisition Costs, or Revenue ex-TAC, for the fourth quarter 2015 grew 51% year-over-year (or 43% at constant currency) to €146 million, or 40.3% of revenue.
  Revenue ex-TAC for fiscal year 2015 grew 59% year-over-year (or 49% at constant currency) to €482 million, or 40.4% of revenue.
• Net income for the fourth quarter 2015 increased 101% year-over-year to €35 million.
  Net income for fiscal year 2015 increased 60% year-over-year to €57 million.
• Adjusted EBITDA for the fourth quarter 2015 increased 53% year-over-year (or 49% at constant currency) to €49 million, or 13.5% of revenue.
  Adjusted EBITDA for fiscal year 2015 increased 64% year-over-year (or 59% at constant currency) to €130 million, or 10.9% of revenue.
• Adjusted net income per diluted share for the fourth quarter 2015 was €0.66.
  Adjusted net income per diluted share for the fiscal year 2015 was €1.26.
• Free cash flow for the fourth quarter 2015 increased 45% year-over-year to €43 million.
  Free cash flow for fiscal year 2015 increased 8% year-over-year to €57 million.

"2015 was another terrific year for us. We crossed the 10,000 client and €1 billion revenue marks while continuing to invest significantly in innovation," said Eric Eichmann, CEO. "I am thrilled to take the helm at such an exciting time and look forward to our 2016 initiatives."

"I am very pleased with our growing profitability and strong free cash flow generation in 2015," said Benoit Fouilland, Chief Financial Officer. "Our unique financial model continues to be a key differentiator in our space."

 

Operating Highlights

• We added over 900 net clients in Q4 2015, while maintaining client retention at over 90%.
• Over 47% of our Revenue ex-TAC was generated from mobile ads during the month of December 2015.
• Our Q4 2014 clients generated 20% more Revenue ex-TAC at constant currency in Q4 2015, demonstrating our ability to drive revenue expansion within our customer base.
• More than 3,000 of our clients were live on Facebook mobile via our integration with dynamic product ads as of December 31, 2015.
• In Q4 2015, we generated 25% of our Revenue ex-TAC from users that were matched on at least two devices, illustrating the continued deployment of our cross-device solution to our clients.

Revenue ex-TAC

Revenue ex-TAC for the fourth quarter 2015 grew 51%, or 43% at constant currency, to €146 million, compared with €96 million in the fourth quarter 2014. This increase was primarily driven by the continued roll-out of our technology improvements across all devices including mobile, the addition of a record number of new clients and the expansion of our direct relationships with publishers.

Revenue ex-TAC for fiscal year 2015 grew 59%, or 49% at constant currency, to €482 million, compared with €304 million in fiscal year 2014.

• In the Americas region, Revenue ex-TAC for the fourth quarter 2015 grew by 78% year-over-year, or 61% at constant currency, to €60 million and represented 41% of total Revenue ex-TAC.
  Americas Revenue ex-TAC for fiscal year 2015 grew by 98% compared to 2014, or 73% at constant currency, to €178 million and accounted for 37% of total Revenue ex-TAC.
• In the EMEA region, Revenue ex-TAC in the fourth quarter 2015 grew by 23% year-over-year, or 22% at constant currency, to €57 million and represented 39% of total Revenue ex-TAC.
  EMEA Revenue ex-TAC for fiscal year 2015 increased by 32% compared to 2014, or 31% at constant currency, to €205 million and accounted for 43% of total Revenue ex-TAC.
• In the Asia-Pacific region, Revenue ex-TAC in the fourth quarter 2015 grew by 76% year-over-year, or 62% at constant currency, to €30 million and represented 20% of total Revenue ex-TAC.
  Asia-Pacific Revenue ex-TAC for fiscal year 2015 grew by 68% compared to 2014, or 57% at constant currency, to €99 million and accounted for 21% of total Revenue ex-TAC.

Revenue ex-TAC margin as a percentage of revenue for the fourth quarter 2015 was 40.3%, in line with prior quarters.

Revenue ex-TAC margin as a percentage of revenue for fiscal year 2015 was 40.4%, in line with prior years.

Adjusted EBITDA and Operating Expenses

Adjusted EBITDA for the fourth quarter 2015 was €49 million, an increase of 53%, or 49% at constant currency, compared with €32 million for the fourth quarter 2014. This increase in Adjusted EBITDA is primarily the result of the strong Revenue ex-TAC performance in the quarter. We incurred slightly higher than anticipated expenses, primarily as a result of the negative impact of changes in foreign currency exchange rates and variable costs.

Adjusted EBITDA for fiscal year 2015 was €130 million, an increase of 64%, or 59% at constant currency, compared with €79 million for fiscal year 2014.

Adjusted EBITDA margin as a percentage of revenue for the fourth quarter was 13.5% compared with 13.7% in the fourth quarter 2014.

Adjusted EBITDA margin as a percentage of revenue for fiscal year 2015 was 10.9%, a 0.2 percentage point improvement compared with 10.7% for fiscal year 2014. Excluding the impact of investments in search marketing in 2015, Adjusted EBITDA margin as a percentage of revenue for fiscal year 2015 was 12.1%, a 1.4 percentage point improvement compared with fiscal year 2014.

Operating expenses for the fourth quarter 2015 increased by 50% to €99 million compared with the fourth quarter 2014. Operating expenses for the fourth quarter 2015, excluding the impact of share-based compensation expense, pension costs, depreciation and amortization and acquisition-related deferred price consideration, which we refer to as Non-IFRS Operating Expenses, were €89 million, an increase of 52% compared with the fourth quarter 2014. This increase is primarily related to year-over-year headcount growth in Research & Development (60%) and Sales & Operations (35%), as we continued to scale our organization.

Operating expenses for fiscal year 2015 were €356 million, an increase of 57% compared with fiscal year 2014. On a Non-IFRS basis, our operating expenses for fiscal year 2015 were €322 million, an increase of 58% compared with fiscal year 2014. Non-IFRS operating expenses as a percentage of revenue for fiscal year 2015 were 27.0%, a decrease of 0.4 percentage points compared with fiscal year 2014, driven by the decrease in our Sales & Operations and General & Administrative expenses, by 0.3 percentage points and 0.5 percentage points respectively. Excluding the impact of investments in search marketing in 2015, Non-IFRS operating expenses as a percentage of revenue were 25.7% for fiscal year 2015, a decrease of 1.7 percentage points compared with fiscal year 2014.

Net Income and Adjusted Net Income

Net income for the fourth quarter 2015 was €35 million, an increase of 101% compared with €18 million for the fourth quarter 2014. Net income available to shareholders of Criteo S.A. for the fourth quarter 2015 was €35 million, or €0.53 per share on a diluted basis, compared with €17 million, or €0.27 per share on a diluted basis, for the fourth quarter 2014.

Net income for fiscal year 2015 was €57 million, an increase of 60% compared with €35 million for fiscal year 2014. Net income available to shareholders of Criteo S.A. for fiscal year 2015 was €54 million, or €0.84 per diluted share, compared with €34 million, or €0.55 per diluted share, for fiscal year 2014.

Adjusted Net Income, or net income adjusted to eliminate the impact of share-based compensation expense, amortization of acquisition-related intangible assets, acquisition-related deferred price consideration and the tax impact of these adjustments, for the fourth quarter 2015 was €43 million, or €0.66 per share on a diluted basis, an increase of 83% compared with €23 million, or €0.37 per share on a diluted basis, for the fourth quarter 2014.

Adjusted Net Income for fiscal year 2015 was €82 million, or €1.26 per share on a diluted basis, an increase of 53% compared with €53 million, or €0.86 per share on a diluted basis, for fiscal year 2014.

Cash Flow and Cash Position

Cash flow from operating activities for the fourth quarter 2015 increased 53% to €60 million, compared with €40 million for the fourth quarter 2014.

Cash flow from operating activities for fiscal year 2015 increased 41% to €124 million, compared with €88 million for fiscal year 2014.

Free cash flow, defined as cash flow from operating activities less acquisition of intangible assets, property, plant and equipment and net of proceeds from disposal, increased 45% to €43 million for the fourth quarter 2015, compared with €30 million for the fourth quarter 2014.

Free cash flow for fiscal year 2015 increased 8% to €57 million, compared with €52 million for fiscal year 2014.

Total cash and cash equivalents were €325 million as of December 31, 2015, an increase of €35 million compared to December 31, 2014.

Business Outlook

As of January 1, 2016, we began reporting as a U.S. domestic registrant under the Securities Exchange Act of 1934. As a result, we are required under U.S. Securities and Exchange Commission ("SEC") rules to prepare our financial statements in accordance with U.S. GAAP, rather than IFRS, and to present our financial information in U.S. dollars instead of euros. Our first Annual Report on Form 10-K will present our results for 2013, 2014 and 2015 in U.S. dollars and in accordance with U.S. GAAP. In addition, from the first quarter 2016 onward, we will be presenting our results in U.S. dollars and in accordance with U.S. GAAP. Accordingly, the outlook for the first quarter and fiscal year 2016 is no longer provided in euros and in accordance with IFRS but rather provided in U.S. dollars and in accordance with U.S. GAAP.

The following forward-looking statements reflect Criteo's expectations as of February 10, 2016.

First Quarter 2016 Guidance:

• We expect Revenue ex-TAC for the first quarter 2016 to be between $153 million and $158 million (or between €139 million and €144 million).
• We expect Adjusted EBITDA for the first quarter 2016 to be between $36 million and $41 million (or between €33 million and €37 million).

Fiscal Year 2016 Guidance:

• We expect Revenue ex-TAC growth for fiscal year 2016 to be between 30% and 34% at constant currency.
• We expect our Adjusted EBITDA margin as a percentage of revenue for fiscal year 2016 to increase between 60 basis points and 100 basis points compared to fiscal year 2015.

The above guidance assumes no additional acquisitions are completed during the first quarter ending March 31, 2016 and the fiscal year ending December 31, 2016.

Non-IFRS/non-GAAP Financial Measures

This press release and its attachments include the following financial measures defined as non-IFRS/non-GAAP financial measures by the SEC: Revenue ex-TAC, Revenue ex-TAC by Region, Revenue ex-TAC margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income per diluted share, Free Cash Flow, and Non-IFRS/Non-GAAP Operating Expenses. These measures are not calculated in accordance with IFRS or 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 core geographies. Revenue ex-TAC and Revenue ex-TAC by Region 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 core business and across our core geographies. Accordingly, we believe that Revenue ex-TAC and Revenue ex-TAC by Region 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 income (loss) from operations before interest, taxes, depreciation and amortization, adjusted to eliminate the impact of share-based compensation expense, pension service costs and acquisition-related deferred price consideration. Adjusted EBITDA 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‑ and long-term operational plans. In particular, we believe that by eliminating non-cash compensation expense, pension costs and acquisition-related deferred price consideration, Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Adjusted EBITDA provides 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 share-based compensation expense, amortization of acquisition-related intangible assets, acquisition-related deferred price consideration, and the tax impact of these adjustments. Adjusted Net Income 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 by eliminating share-based compensation expense, amortization of acquisition-related intangible assets and acquisition-related deferred price consideration and the tax impact of these adjustments, Adjusted Net Income can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that Adjusted Net Income provides 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 net of proceeds from disposal. 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.

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 and Free Cash Flow to cash flow from operating activities, in each case, the most comparable IFRS and U.S. GAAP measurement. Our use of non-IFRS/non-GAAP financial measures has limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under IFRS or 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 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 IFRS and U.S. GAAP financial results, including revenue and net income.

With respect to our expectations under "Business Outlook" above, 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 stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our share price. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future U.S. GAAP financial results.

Forward-Looking Statements Disclosure

This press release contains forward-looking statements, including projected financial results for the quarter ending March 31, 2016 and the fiscal year ending December 31, 2016, 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: recent growth rates not being indicative of future growth, uncertainty regarding legislative, regulatory or self-regulatory developments regarding data privacy matters, uncertainty regarding our ability to access a consistent supply of internet display advertising inventory and expand access to such inventory, the investments in new business opportunities and the timing of these investments, the impact of competition, our ability to manage growth, potential fluctuations in operating results, our ability to grow our base of clients, uncertainty regarding international growth and expansion, 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 20-F filed with the SEC on March 27, 2015, as well as future filings and reports by the Company. 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, February 10, 2016, at 8:00am ET, 2:00pm CET. The conference call will be webcast live on the Company's website http://ir.criteo.com and will be available for replay.

Conference call details:

• U.S. callers: +1 877 870 4263
• International callers: +1 412 317 0790 or +33 1 76 74 05 02

Please ask to be joined into the "Criteo S.A." call.

As the Company will report for the first time its financial statements presented in U.S. dollars and in accordance with U.S. GAAP, Criteo will host a separate conference call today, February 10, 2016, at 9:15am ET, 3:15pm CET. The purpose of this second call will be to discuss the conversion of its financial statements presented in euros and in accordance with IFRS into financial statements presented in U.S. dollars and in accordance with U.S. GAAP. The conference call will be webcast live on the Company's website http://ir.criteo.com and will be available for replay.

Conference call details:

• U.S. callers: +1 877 870 4263,
• International callers: +1 412 317 0790 or +33 1 76 74 05 02 

Please ask to be joined into the  "Criteo U.S. GAAP Transition call".

About Criteo

Criteo (NASDAQ: CRTO) delivers personalized performance marketing at an extensive scale. Measuring return on post-click sales, Criteo makes ROI transparent and easy to measure. As of December 31, 2015, Criteo has over 1,800 employees in 27 offices across the Americas, EMEA and Asia-Pacific, serving over 10,000 advertisers worldwide and with direct relationships with close to 14,000 publishers. For more information, please visit www.criteo.com.

Financial information to follow

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

		Three Months Ended											Twelve Months Ended
		December 31,											December 31,
		2014				2015				YoY Change			2014				2015				YoY Change
Revenue as reported		€	232,796			€	361,732			55	%		€	745,081			€	1,193,414			60	%
Conversion impact euro/other currencies						(22,121		)									(78,041		)
Revenue at constant currency (*)		232,796				339,611				46	%		745,081				1,115,373				50	%
Traffic acquisition costs as reported		(136,493		)		(215,980		)		58	%		(441,427		)		(711,755		)		61	%
Conversion impact euro/other currencies						13,698											47,344
Traffic acquisition costs at constant currency (*)		(136,493		)		(202,282		)		48	%		(441,427		)		(664,411		)		51	%
Revenue ex-TAC as reported		96,303				145,752				51	%		303,654				481,659				59	%
Conversion impact euro/other currencies						(8,422		)									(30,697		)
Revenue ex-TAC at constant currency (*)		96,303				137,330				43	%		303,654				450,962				49	%
Revenue ex-TAC/Revenue as reported		41.4		%		40.3		%					40.8		%		40.4		%
Other cost of revenue as reported		(11,054		)		(16,213		)		47	%		(36,150		)		(56,100		)		55	%
Conversion impact euro/other currencies						1,423											5,639
Other cost of revenue at constant currency (*)		(11,054		)		(14,790		)		34	%		(36,150		)		(50,461		)		40	%
Adjusted EBITDA		31,854				48,889				53	%		79,427				130,064				64	%
Conversion impact euro/other currencies						(1,481		)									(3,406		)
Adjusted EBITDA at constant currency (*)		31,854				47,408				49	%		79,427				126,658				59	%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SOURCE Criteo S.A.