Criteo Reports Strong Results For The Second Quarter 2016
NEW YORK, Aug. 3, 2016 /PRNewswire/ -- Criteo S.A. (NASDAQ: CRTO), the performance marketing technology company, today announced financial results for the second quarter ended June 30, 2016.
- Revenue increased 36% (or 35% at constant currency1) to $407 million.
- Revenue excluding Traffic Acquisition Costs, or Revenue ex-TAC, grew 36% (or 35% at constant currency) to $166 million, or 40.8% of revenue.
- Net Income increased 240% to $13 million.
- Adjusted EBITDA grew 66% (or 61% at constant currency) to $39 million, representing 9.6% of revenue and 23.6% of Revenue ex-TAC.
- Adjusted Net Income per diluted share grew 106% to $0.33.
"Our performance marketing platform best positions us to offer advertisers the relevant, accountable and seamless marketing across all environments they are demanding," said Eric Eichmann, CEO.
"We deliver fast growth and expanding profitability," said Benoit Fouilland, CFO. "Our ability to deliver operating leverage while investing in innovation demonstrates the scalability of our model."
Operating Highlights
- We added over 900 net clients in the second quarter, a new record in the history of Criteo, approaching 12,000 clients.
- Over 50% of our business was generated on mobile ads in the second quarter.
- We went live on Instagram in June, adding a new source of social inventory for advertisers. Many advertisers are now live on Instagram.
- Users matched through our Universal Match solution generated 47% of Revenue ex-TAC in the second quarter, reflecting the growing adoption of our solution and the high value of matched users.
- Existing clients in Q2 2015 generated 14% more Revenue ex-TAC at constant currency in Q2 2016, in line with expectations and demonstrating our ability to expand revenues within our client base.
Revenue ex-TAC
Revenue ex-TAC grew 36%, or 35% at constant currency, to $166 million (Q2 2015: $122 million). This increase was primarily driven by new technology innovation across all devices and platforms, the addition of a new record quarterly number of clients across regions and the continued expansion of our publisher relationships.
- In the Americas region, Revenue ex-TAC grew 36%, or 38% at constant currency, to $60 million (Q2 2015: $44 million) and represented 36% of total Revenue ex-TAC.
- In the EMEA region, Revenue ex-TAC grew 25%, or 25% at constant currency, to $67 million (Q2 2015: $54 million) and represented 40% of total Revenue ex-TAC.
- In the Asia-Pacific region, Revenue ex-TAC grew 61%, or 50% at constant currency, to $39 million (Q2 2015: $24 million) and represented 24% of total Revenue ex-TAC.
Revenue ex-TAC margin as a percentage of revenue was 40.8% (Q2 2015: 40.8%), in line with prior quarters.
|
1 Growth at constant currency excludes the impact of foreign currency fluctuations and is computed by applying the 2015 average exchange rates for the relevant period to 2016 figures. |
Adjusted EBITDA and Operating Expenses
Adjusted EBITDA grew 66%, or 61% at constant currency, to $39 million (Q2 2015: $24 million). This increase in Adjusted EBITDA is primarily the result of the strong Revenue ex-TAC performance in the quarter.
Adjusted EBITDA margin as a percentage of revenue improved 170 basis points to 9.6% (Q2 2015: 7.9%) and 420 basis points as a percentage of Revenue ex-TAC to 23.6% (Q2 2015: 19.4%). This margin improvement, while we continue to invest in R&D and innovation, demonstrates the scalability and operating leverage of our model.
Operating expenses increased 28% to $128 million (Q2 2015: $100 million). Operating expenses, excluding the impact of equity awards compensation expense, pension service costs, depreciation and amortization, acquisition-related costs and deferred price consideration, which we refer to as Non-GAAP Operating Expenses, increased 27% to $116 million (Q2 2015: $91 million). This increase is primarily related to the year-over-year growth in headcount in Research and Development (46%), Sales and Operations (21%) and General and Administrative (28%), as we continued to scale the entire organization.
Non-GAAP Operating Expenses as a percentage of revenue decreased by 190 basis points to 28.5% (Q2 2015: 30.4%) and by 480 basis points as a percentage of Revenue ex-TAC to 69.8% (Q2 2015: 74.5%).
Net Income and Adjusted Net Income
Net income increased 240% to $13 million (Q2 2015: $4 million). Net income available to shareholders of Criteo S.A. was $12 million, or $0.19 per share on a diluted basis (Q2 2015: $4 million, or $0.05 per share on a diluted basis).
Adjusted Net income, defined as 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 and the tax impact of these adjustments, increased 106% to $22 million, or $0.33 per share on a diluted basis (Q2 2015: $11 million, or $0.16 per share on a diluted basis).
Cash Flow and Cash Position
Cash flow from operating activities increased 61% to $19 million (Q2 2015: $12 million).
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, was $(3) million (Q2 2015: $(6) million), improving by 51% year-over-year.
Total cash and cash equivalents were $377 million as of June 30, 2016 (December 31, 2015: $354 million).
Business Outlook
The following forward-looking statements reflect Criteo's expectations as of August 3, 2016.
Third Quarter 2016 Guidance:
- We expect Revenue ex-TAC to be between $170 million and $174 million.
- We expect Adjusted EBITDA to be between $42 million and $46 million.
Fiscal Year 2016 Guidance:
- We expect Revenue ex-TAC growth to be between 30% and 34% at constant currency.
- We expect our Adjusted EBITDA margin as a percentage of revenue to increase between 60 basis points and 100 basis points.
The above guidance for the third quarter 2016 assumes the following exchange rates for the main currencies having an impact on our business: a U.S. dollar-euro rate of 0.90, a U.S. dollar-Japanese Yen of 110, a U.S. dollar-British pound rate of 0.72 and a U.S. dollar-Brazilian real rate of 3.60.
The above guidance assumes no acquisitions are completed during the third quarter ending September 30, 2016 and the fiscal year ending December 31, 2016.
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 (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-GAAP Operating Expenses. These measures are not calculated in accordance with accounting principles generally accepted in the United States of America ("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 consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of equity awards compensation expense, pension service costs, acquisition-related costs and 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 equity awards compensation expense, service costs (pension), acquisition-related costs and 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 equity awards compensation expense, amortization of acquisition-related intangible assets, acquisition-related costs and 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 equity awards compensation expense, amortization of acquisition-related intangible assets, acquisition-related costs and 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 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 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.
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 equity awards 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 September 30, 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 10-K filed with the SEC on February 29, 2016, 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, August 3, 2016, at 8:00 AM ET, 2:00 PM 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: +1 855 209 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) delivers personalized performance marketing at an extensive scale. Measuring return on post-click sales, Criteo makes ROI transparent and easy to measure. Criteo has over 2,000 employees in 31 offices across the Americas, EMEA and Asia-Pacific, serving 12,000 advertisers worldwide and with direct relationships with 17,000 publishers.
For more information, please visit www.criteo.com.
Financial information to follow
|
CRITEO S.A. | |||||||||
|
Consolidated Statement of Financial Position | |||||||||
|
(U.S. dollars in thousands) | |||||||||
|
(unaudited) | |||||||||
|
December 31, |
June 30, |
||||||||
|
2015 |
2016 |
||||||||
|
Assets |
|||||||||
|
Current assets: |
|||||||||
|
Cash and cash equivalents |
$ |
353,537 |
$ |
377,407 |
|||||
|
Trade receivables, net of allowances |
261,581 |
266,436 |
|||||||
|
Income taxes |
2,714 |
5,277 |
|||||||
|
Other taxes |
29,552 |
39,527 |
|||||||
|
Other current assets |
16,030 |
23,164 |
|||||||
|
Total current assets |
663,414 |
711,811 |
|||||||
|
Property, plant and equipment, net |
82,482 |
97,236 |
|||||||
|
Intangible assets, net |
16,470 |
17,170 |
|||||||
|
Goodwill |
41,973 |
46,859 |
|||||||
|
Non-current financial assets |
17,184 |
17,010 |
|||||||
|
Deferred tax assets |
20,196 |
25,330 |
|||||||
|
Total non-current assets |
178,305 |
203,605 |
|||||||
|
Total assets |
$ |
841,719 |
$ |
915,416 |
|||||
|
Liabilities and shareholders' equity |
|||||||||
|
Current liabilities: |
|||||||||
|
Trade payables |
$ |
246,382 |
$ |
240,757 |
|||||
|
Contingencies |
668 |
283 |
|||||||
|
Income taxes |
15,365 |
9,455 |
|||||||
|
Financial liabilities - current portion |
7,156 |
6,011 |
|||||||
|
Other taxes |
30,463 |
33,880 |
|||||||
|
Employee - related payables |
42,275 |
46,372 |
|||||||
|
Other current liabilities |
15,531 |
21,531 |
|||||||
|
Total current liabilities |
357,840 |
358,289 |
|||||||
|
Deferred tax liabilities |
139 |
518 |
|||||||
|
Retirement benefit obligation |
1,445 |
1,996 |
|||||||
|
Financial liabilities - non current portion |
3,272 |
2,907 |
|||||||
|
Total non-current liabilities |
4,856 |
5,421 |
|||||||
|
Total liabilities |
362,696 |
363,710 |
|||||||
|
Commitments and contingencies |
|||||||||
|
Shareholders' equity: |
|||||||||
|
Common shares, €0.025 per value, 62,470,881 and 63,562,863 shares authorized, issued and outstanding at December 31, 2015 and June 30, 2016, respectively. |
2,052 |
2,082 |
|||||||
|
Additional paid-in capital |
425,220 |
456,242 |
|||||||
|
Accumulated other comprehensive (loss) |
(69,023) |
(60,329) |
|||||||
|
Retained earnings |
116,076 |
145,407 |
|||||||
|
Equity - attributable to shareholders of Criteo S.A. |
474,325 |
543,402 |
|||||||
|
Non-controlling interests |
4,698 |
8,304 |
|||||||
|
Total equity |
479,023 |
551,706 |
|||||||
|
Total equity and liabilities |
$ |
841,719 |
$ |
915,416 |
|||||
|
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, |
|||||||||||||||||||||
|
2015 |
2016 |
YoYChange |
2015 |
2016 |
YoYChange | |||||||||||||||||
|
Revenue |
$ |
299,306 |
$ |
407,201 |
36 |
% |
$ |
593,478 |
$ |
808,454 |
36 |
% | ||||||||||
|
Cost of revenue |
||||||||||||||||||||||
|
Traffic acquisition cost |
(177,239) |
(240,969) |
36 |
% |
(353,127) |
(479,724) |
36 |
% | ||||||||||||||
|
Other cost of revenue |
(14,243) |
(20,279) |
42 |
% |
(27,212) |
(38,618) |
42 |
% | ||||||||||||||
|
Gross profit |
107,824 |
145,953 |
35 |
% |
213,139 |
290,112 |
36 |
% | ||||||||||||||
|
Operating expenses: |
||||||||||||||||||||||
|
Research and development expenses |
(19,853) |
(30,235) |
52 |
% |
(37,699) |
(57,396) |
52 |
% | ||||||||||||||
|
Sales and operations expenses |
(59,727) |
(69,225) |
16 |
% |
(112,810) |
(133,698) |
19 |
% | ||||||||||||||
|
General and administrative expenses |
(20,404) |
(28,610) |
40 |
% |
(37,950) |
(53,347) |
41 |
% | ||||||||||||||
|
Total Operating expenses |
(99,984) |
(128,070) |
28 |
% |
(188,459) |
(244,441) |
30 |
% | ||||||||||||||
|
Income from operations |
7,840 |
17,883 |
128 |
% |
24,680 |
45,671 |
85 |
% | ||||||||||||||
|
Financial income (expense) |
(2,546) |
(94) |
(96) |
% |
1,374 |
(1,412) |
(203) |
% | ||||||||||||||
|
Income before taxes |
5,294 |
17,789 |
236 |
% |
26,054 |
44,259 |
70 |
% | ||||||||||||||
|
Provision for income taxes |
(1,365) |
(4,450) |
226 |
% |
(8,508) |
(12,394) |
46 |
% | ||||||||||||||
|
Net Income |
$ |
3,929 |
$ |
13,339 |
240 |
% |
$ |
17,546 |
$ |
31,865 |
82 |
% | ||||||||||
|
Net income available to shareholders of Criteo S.A |
$ |
3,540 |
$ |
12,200 |
$ |
16,522 |
$ |
29,330 |
||||||||||||||
|
Net income available to non-controlling interests |
$ |
389 |
$ |
1,139 |
$ |
1,024 |
$ |
2,535 |
||||||||||||||
|
Weighted average shares outstanding used in computing per share amounts: |
||||||||||||||||||||||
|
Basic |
61,719,367 |
63,246,785 |
61,448,678 |
62,928,221 |
||||||||||||||||||
|
Diluted |
65,279,611 |
65,625,097 |
65,012,687 |
65,232,938 |
||||||||||||||||||
|
Net income allocated to shareholders of Criteo S.A per share: |
||||||||||||||||||||||
|
Basic |
$ |
0.06 |
$ |
0.19 |
$ |
0.27 |
$ |
0.47 |
||||||||||||||
|
Diluted |
$ |
0.05 |
$ |
0.19 |
$ |
0.25 |
$ |
0.45 |
||||||||||||||
|
CRITEO S.A. | ||||||||||||||||
|
Consolidated Statement of Cash Flows | ||||||||||||||||
|
(U.S. dollars in thousands) | ||||||||||||||||
|
(unaudited) | ||||||||||||||||
|
Three Months Ended |
Six Months Ended | |||||||||||||||
|
June 30, |
June 30, | |||||||||||||||
|
2015 |
2016 |
2015 |
2016 |
|||||||||||||
|
Net income |
$ |
3,929 |
$ |
13,339 |
$ |
17,546 |
$ |
31,865 |
||||||||
|
Adjustments to reconcile to cash from operating activities |
17,646 |
30,121 |
39,530 |
59,626 |
||||||||||||
|
- Amortization and provisions |
10,938 |
16,345 |
19,201 |
29,525 |
||||||||||||
|
- Equity awards compensation expense (1) |
5,325 |
7,695 |
11,642 |
16,065 |
||||||||||||
|
- Net gain or loss on disposal of non-current assets |
22 |
— |
26 |
— |
||||||||||||
|
- Interest accrued |
2 |
1,578 |
7 |
1,580 |
||||||||||||
|
- Non-cash financial income and expenses |
(6) |
8 |
147 |
18 |
||||||||||||
|
- Change in deferred taxes |
(2,200) |
(3,285) |
(2,170) |
(4,424) |
||||||||||||
|
- Income tax for the period |
3,565 |
7,780 |
10,677 |
16,862 |
||||||||||||
|
Changes in working capital requirement |
(4,125) |
(10,297) |
4,779 |
(27,436) |
||||||||||||
|
- (Increase)/decrease in trade receivables |
(3,218) |
(7,126) |
(12,639) |
(2,368) |
||||||||||||
|
- Increase/(decrease) in trade payables |
3,682 |
(1,244) |
27,619 |
(15,149) |
||||||||||||
|
- (Increase)/decrease in other current assets |
(5,243) |
(5,969) |
(15,883) |
(15,777) |
||||||||||||
|
- Increase/(decrease) in other current liabilities |
654 |
4,042 |
5,682 |
5,858 |
||||||||||||
|
Income taxes paid |
(5,512) |
(13,889) |
(8,909) |
(25,874) |
||||||||||||
|
CASH FROM OPERATING ACTIVITIES |
11,938 |
19,274 |
52,946 |
38,181 |
||||||||||||
|
Acquisition of intangible assets, property, plant and equipment |
(29,630) |
(25,564) |
(41,156) |
(39,178) |
||||||||||||
|
Change in accounts payable related to intangible assets, property, plant and equipment |
11,282 |
3,178 |
9,948 |
4,685 |
||||||||||||
|
FREE CASH FLOW |
(6,410) |
(3,112) |
21,738 |
3,688 |
||||||||||||
|
Payments for acquired business, net of cash acquired |
(2,867) |
(5,074) |
(20,075) |
(5,074) |
||||||||||||
|
Change in other non-current financial assets |
(1,492) |
(207) |
(5,244) |
574 |
||||||||||||
|
CASH USED FOR INVESTING ACTIVITIES |
(22,707) |
(27,667) |
(56,527) |
(38,993) |
||||||||||||
|
Issuance of long-term borrowings |
1,567 |
2,295 |
2,394 |
3,059 |
||||||||||||
|
Repayment of borrowings |
(1,369) |
(3,944) |
(4,647) |
(5,448) |
||||||||||||
|
Proceeds from capital increase |
3,664 |
10,106 |
6,434 |
15,582 |
||||||||||||
|
Change in other financial liabilities |
— |
(171) |
(1,000) |
(171) |
||||||||||||
|
CASH FROM FINANCING ACTIVITIES |
3,862 |
8,286 |
3,181 |
13,022 |
||||||||||||
|
CHANGE IN NET CASH AND CASH EQUIVALENTS |
(6,907) |
(107) |
(400) |
12,210 |
||||||||||||
|
Net cash and cash equivalents at beginning of period |
316,376 |
386,110 |
351,827 |
353,537 |
||||||||||||
|
Effect of exchange rates changes on cash and cash equivalents |
11,640 |
(8,596) |
(30,318) |
11,660 |
||||||||||||
|
Net cash and cash equivalents at end of period |
$ |
321,109 |
$ |
377,407 |
$ |
321,109 |
$ |
377,407 |
||||||||
|
(1) out of which $7.2 million and $15.5 million was share-based compensation expense according to ASC 718 - Compensation - stock compensation for the quarter ended and year to date June 30, 2016, respectively. |
|
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, |
||||||||||||||||||||||||||||
|
Region |
2015 |
2016 |
YoYChange |
YoYChange atConstantCurrency |
2015 |
2016 |
YoYChange |
YoYChange atConstantCurrency | |||||||||||||||||||||
|
Revenue |
|||||||||||||||||||||||||||||
|
Americas |
$ |
110,872 |
$ |
156,522 |
41 |
% |
43 |
% |
$ |
211,496 |
$ |
303,695 |
44 |
% |
47 |
% | |||||||||||||
|
EMEA |
126,807 |
153,899 |
21 |
% |
22 |
% |
259,015 |
313,305 |
21 |
% |
23 |
% | |||||||||||||||||
|
Asia-Pacific |
61,627 |
96,780 |
57 |
% |
46 |
% |
122,967 |
191,454 |
56 |
% |
49 |
% | |||||||||||||||||
|
Total |
299,306 |
407,201 |
36 |
% |
35 |
% |
593,478 |
808,454 |
36 |
% |
37 |
% | |||||||||||||||||
|
Traffic acquisition costs |
|||||||||||||||||||||||||||||
|
Americas |
(66,853) |
(96,560) |
44 |
% |
46 |
% |
(128,097) |
(187,488) |
46 |
% |
49 |
% | |||||||||||||||||
|
EMEA |
(73,155) |
(86,820) |
19 |
% |
19 |
% |
(151,313) |
(178,006) |
18 |
% |
20 |
% | |||||||||||||||||
|
Asia-Pacific |
(37,231) |
(57,589) |
55 |
% |
43 |
% |
(73,717) |
(114,230) |
55 |
% |
48 |
% | |||||||||||||||||
|
Total |
(177,239) |
(240,969) |
36 |
% |
34 |
% |
(353,127) |
(479,724) |
36 |
% |
36 |
% | |||||||||||||||||
|
Revenue ex-TAC |
|||||||||||||||||||||||||||||
|
Americas |
44,019 |
59,962 |
36 |
% |
38 |
% |
83,399 |
116,207 |
39 |
% |
43 |
% | |||||||||||||||||
|
EMEA |
53,652 |
67,079 |
25 |
% |
25 |
% |
107,702 |
135,299 |
26 |
% |
28 |
% | |||||||||||||||||
|
Asia-Pacific |
24,396 |
39,191 |
61 |
% |
50 |
% |
49,250 |
77,224 |
57 |
% |
51 |
% | |||||||||||||||||
|
Total |
$ |
122,067 |
$ |
166,232 |
36 |
% |
35 |
% |
$ |
240,351 |
$ |
328,730 |
37 |
% |
38 |
% | |||||||||||||
|
(1) 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 in this Form 8-K 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 core business. Accordingly, we believe that Revenue ex-TAC and Revenue, Traffic Acquisition Costs and Revenue ex-TAC by Region 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 Revenue ex-TAC and 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, | ||||||||||||||
|
2015 |
2016 |
2015 |
2016 |
||||||||||||
|
Net income |
$ |
3,929 |
$ |
13,339 |
$ |
17,546 |
$ |
31,865 |
|||||||
|
Adjustments: |
|||||||||||||||
|
Financial (income) expense |
2,546 |
94 |
(1,374) |
1,412 |
|||||||||||
|
Provision for income taxes |
1,365 |
4,450 |
8,508 |
12,394 |
|||||||||||
|
Equity awards compensation expense |
5,325 |
7,695 |
11,642 |
16,065 |
|||||||||||
|
Research and development |
$ |
1,162 |
$ |
2,179 |
$ |
2,640 |
$ |
4,581 |
|||||||
|
Sales and operations |
2,903 |
2,488 |
6,357 |
5,878 |
|||||||||||
|
General and administrative |
1,260 |
3,028 |
2,645 |
5,606 |
|||||||||||
|
Pension service costs |
110 |
131 |
221 |
260 |
|||||||||||
|
Research and development |
40 |
53 |
81 |
105 |
|||||||||||
|
Sales and operations |
39 |
35 |
78 |
69 |
|||||||||||
|
General and administrative |
31 |
43 |
62 |
86 |
|||||||||||
|
Depreciation and amortization expense |
10,278 |
13,300 |
18,707 |
25,817 |
|||||||||||
|
Cost of revenue |
6,813 |
9,220 |
12,784 |
17,439 |
|||||||||||
|
Research and development |
1,977 |
1,457 |
3,122 |
3,465 |
|||||||||||
|
Sales and operations |
1,112 |
2,019 |
2,104 |
3,791 |
|||||||||||
|
General and administrative |
376 |
604 |
697 |
1,122 |
|||||||||||
|
Acquisition-related costs |
— |
148 |
— |
148 |
|||||||||||
|
General and administrative |
— |
148 |
— |
148 |
|||||||||||
|
Acquisition-related deferred price consideration |
115 |
44 |
224 |
85 |
|||||||||||
|
Research and development |
115 |
44 |
224 |
85 |
|||||||||||
|
Total net adjustments |
19,739 |
25,862 |
37,928 |
56,181 |
|||||||||||
|
Adjusted EBITDA (1) |
$ |
23,668 |
$ |
39,201 |
$ |
55,474 |
$ |
88,046 |
|||||||
|
(1) 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, 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 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, pension service costs, acquisition-related costs and deferred price consideration in calculating 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 others in understanding and evaluating our results of operations in the 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. | ||||||||||||||||
|
Detailed Information on Selected Items | ||||||||||||||||
|
(U.S. dollars in thousands) | ||||||||||||||||
|
(unaudited) | ||||||||||||||||
|
Three Months Ended |
Six Months Ended | |||||||||||||||
|
June 30, |
June 30, | |||||||||||||||
|
2015 |
2016 |
2015 |
2016 |
|||||||||||||
|
Equity awards compensation expense |
||||||||||||||||
|
Research and development |
$ |
1,162 |
$ |
2,179 |
$ |
2,640 |
$ |
4,581 |
||||||||
|
Sales and operations |
2,903 |
2,488 |
6,357 |
5,878 |
||||||||||||
|
General and administrative |
1,260 |
3,028 |
2,645 |
5,606 |
||||||||||||
|
Total equity awards compensation expense |
5,325 |
7,695 |
11,642 |
16,065 |
||||||||||||
|
Pension service costs |
||||||||||||||||
|
Research and development |
40 |
53 |
81 |
105 |
||||||||||||
|
Sales and operations |
39 |
35 |
78 |
69 |
||||||||||||
|
General and administrative |
31 |
43 |
62 |
86 |
||||||||||||
|
Total pension service costs |
110 |
131 |
221 |
260 |
||||||||||||
|
Depreciation and amortization expense |
||||||||||||||||
|
Cost of revenue |
6,813 |
9,220 |
12,784 |
17,439 |
||||||||||||
|
Research and development |
1,977 |
1,457 |
3,122 |
3,465 |
||||||||||||
|
Sales and operations |
1,112 |
2,019 |
2,104 |
3,791 |
||||||||||||
|
General and administrative |
376 |
604 |
697 |
1,122 |
||||||||||||
|
Total depreciation and amortization expense |
10,278 |
13,300 |
18,707 |
25,817 |
||||||||||||
|
Acquisition-related costs |
||||||||||||||||
|
General and administrative |
— |
148 |
— |
148 |
||||||||||||
|
Total acquisition-related costs |
— |
148 |
— |
148 |
||||||||||||
|
Acquisition-related deferred price consideration |
||||||||||||||||
|
Research and development |
115 |
44 |
224 |
85 |
||||||||||||
|
Total acquisition-related deferred price consideration |
$ |
115 |
$ |
44 |
$ |
224 |
$ |
85 |
||||||||
|
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, | |||||||||||||||
|
2015 |
2016 |
2015 |
2016 |
|||||||||||||
|
Net income |
$ |
3,929 |
$ |
13,339 |
$ |
17,546 |
$ |
31,865 |
||||||||
|
Adjustments: |
||||||||||||||||
|
Equity awards compensation expense |
5,325 |
7,695 |
11,642 |
16,065 |
||||||||||||
|
Amortization of acquisition-related intangible assets |
1,674 |
825 |
2,594 |
2,202 |
||||||||||||
|
Acquisition-related costs |
— |
148 |
— |
148 |
||||||||||||
|
Acquisition-related deferred price consideration |
115 |
44 |
224 |
85 |
||||||||||||
|
Tax impact of the above adjustments |
(426) |
(159) |
(556) |
(387) |
||||||||||||
|
Total net adjustments |
6,688 |
8,553 |
13,904 |
18,113 |
||||||||||||
|
Adjusted net income (1) |
$ |
10,617 |
$ |
21,892 |
$ |
31,450 |
$ |
49,978 |
||||||||
|
Weighted average shares outstanding |
||||||||||||||||
|
- Basic |
61,719,367 |
63,246,785 |
61,448,678 |
62,928,221 |
||||||||||||
|
- Diluted |
65,279,611 |
65,625,097 |
65,012,687 |
65,232,938 |
||||||||||||
|
Adjusted net income per share |
||||||||||||||||
|
- Basic |
$ |
0.17 |
$ |
0.35 |
$ |
0.51 |
$ |
0.79 |
||||||||
|
- Diluted |
$ |
0.16 |
$ |
0.33 |
$ |
0.48 |
$ |
0.77 |
||||||||
|
(1) 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, 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, and the tax impact of the foregoing adjustments in calculating 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 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, |
|||||||||||||||||||||
|
2015 |
2016 |
YoYChange |
2015 |
2016 |
YoYChange | |||||||||||||||||
|
Revenue as reported |
$ |
299,306 |
$ |
407,201 |
36 |
% |
$ |
593,478 |
$ |
808,454 |
36 |
% | ||||||||||
|
Conversion impact U.S. dollar/other currencies |
(4,550) |
3,800 |
||||||||||||||||||||
|
Revenue at constant currency (1) |
$ |
299,306 |
$ |
402,651 |
35 |
% |
$ |
593,478 |
$ |
812,254 |
37 |
% | ||||||||||
|
Traffic acquisition costs as reported |
(177,239) |
(240,969) |
36 |
% |
(353,127) |
(479,724) |
36 |
% | ||||||||||||||
|
Conversion impact U.S. dollar/other currencies |
2,852 |
(1,787) |
||||||||||||||||||||
|
Traffic Acquisition Costs at constant currency (1) |
$ |
(177,239) |
$ |
(238,117) |
34 |
% |
$ |
(353,127) |
$ |
(481,511) |
36 |
% | ||||||||||
|
Revenue ex-TAC (2) as reported |
122,067 |
166,232 |
36 |
% |
240,351 |
328,730 |
37 |
% | ||||||||||||||
|
Conversion impact U.S. dollar/other currencies |
(1,699) |
2,013 |
||||||||||||||||||||
|
Revenue ex-TAC (2) at constant currency (1) |
$ |
122,067 |
$ |
164,533 |
35 |
% |
$ |
240,351 |
$ |
330,743 |
38 |
% | ||||||||||
|
Revenue ex-TAC (2)/Revenue as reported |
41 |
% |
41 |
% |
40 |
% |
41 |
% |
||||||||||||||
|
Other cost of revenue as reported |
(14,243) |
(20,279) |
42 |
% |
(27,212) |
(38,618) |
42 |
% | ||||||||||||||
|
Conversion impact U.S. dollar/other currencies |
265 |
15 |
||||||||||||||||||||
|
Other cost of revenue at constant currency (1) |
$ |
(14,243) |
$ |
(20,014) |
41 |
% |
$ |
(27,212) |
$ |
(38,603) |
42 |
% | ||||||||||
|
Adjusted EBITDA (3) |
23,668 |
39,201 |
66 |
% |
55,474 |
88,046 |
59 |
% | ||||||||||||||
|
Conversion impact U.S. dollar/other currencies |
(1,010) |
(113) |
||||||||||||||||||||
|
Adjusted EBITDA (3) at constant currency (1) |
$ |
23,668 |
$ |
38,191 |
61 |
% |
$ |
55,474 |
$ |
87,933 |
59 |
% | ||||||||||
|
(1) Information in this Form 8-K with respect to results presented on a constant currency basis was calculated by translating current period results at prior period average exchange rates. 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. |
|
(2) Revenue ex-TAC is not a measure calculated in accordance with U.S. GAAP. See the table entitled "Reconciliation of Revenue ex-TAC by Region to Revenue by Region" for a reconciliation of Revenue Ex-TAC to revenue. |
|
(3) Adjusted EBITDA is not a measure calculated in accordance with U.S. GAAP. 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, | ||||||
|
2015 |
2016 |
|||||
|
Shares outstanding as at January 1, |
60,902,695 |
62,470,881 |
||||
|
Weighted average number of shares issued during the period |
545,983 |
457,340 |
||||
|
Basic number of shares - Basic EPS basis |
61,448,678 |
62,928,221 |
||||
|
Dilutive effect of share options, warrants, employee warrants - Treasury method |
3,564,009 |
2,304,717 |
||||
|
Diluted number of shares - Diluted EPS basis |
65,012,687 |
65,232,938 |
||||
|
Shares outstanding as at June 30, |
61,913,692 |
63,562,863 |
||||
|
Total dilutive effect of share options, warrants, employee warrants |
7,119,504 |
8,198,113 |
||||
|
Fully diluted shares as at June 30, |
69,033,196 |
71,760,976 |
||||
|
CRITEO S.A. | |||||||||||
|
Supplemental Financial Information and Operating Metrics | |||||||||||
|
(U.S. dollars in thousands except where stated) | |||||||||||
|
(unaudited) | |||||||||||
|
Q32014 |
Q42014 |
Q12015 |
Q22015 |
Q32015 |
Q42015 |
Q12016 |
Q22016 |
YoYChange |
QoQChange |
||
|
Clients |
6,581 |
7,190 |
7,832 |
8,564 |
9,290 |
10,198 |
10,962 |
11,874 |
39% |
8% |
|
|
Revenue |
258,245 |
294,489 |
294,172 |
299,306 |
332,674 |
397,018 |
401,253 |
407,201 |
36% |
1% |
|
|
Americas |
78,008 |
109,543 |
100,624 |
110,872 |
124,024 |
170,133 |
147,174 |
156,522 |
41% |
6% |
|
|
EMEA |
124,455 |
131,275 |
132,208 |
126,807 |
137,185 |
144,905 |
159,405 |
153,899 |
21% |
(3)% |
|
|
APAC |
55,782 |
53,671 |
61,340 |
61,627 |
71,465 |
81,980 |
94,674 |
96,780 |
57% |
2% |
|
|
TAC |
(155,237) |
(172,538) |
(175,888) |
(177,239) |
(198,970) |
(237,056) |
(238,755) |
(240,969) |
36% |
1% |
|
|
Americas |
(47,250) |
(66,774) |
(61,244) |
(66,853) |
(75,684) |
(104,646) |
(90,929) |
(96,560) |
44% |
6% |
|
|
EMEA |
(73,218) |
(73,264) |
(78,158) |
(73,155) |
(79,710) |
(82,905) |
(91,185) |
(86,820) |
19% |
(5)% |
|
|
APAC |
(34,769) |
(32,500) |
(36,486) |
(37,231) |
(43,576) |
(49,505) |
(56,641) |
(57,589) |
55% |
2% |
|
|
Revenue ex-TAC |
103,008 |
121,951 |
118,284 |
122,067 |
133,704 |
159,962 |
162,498 |
166,232 |
36% |
2% |
|
|
Americas |
30,758 |
42,769 |
39,380 |
44,019 |
48,340 |
65,487 |
56,245 |
59,962 |
36% |
7% |
|
|
EMEA |
51,237 |
58,011 |
54,050 |
53,652 |
57,475 |
62,000 |
68,220 |
67,079 |
25% |
(2)% |
|
|
APAC |
21,013 |
21,171 |
24,854 |
24,396 |
27,889 |
32,475 |
38,033 |
39,191 |
61% |
3% |
|
|
Cash flow from operating activities |
34,151 |
51,170 |
41,007 |
11,938 |
17,500 |
66,706 |
18,907 |
19,274 |
61% |
2% |
|
|
Capital expenditures |
14,832 |
12,562 |
12,862 |
18,348 |
24,066 |
19,205 |
12,109 |
22,386 |
22% |
85% |
|
|
Net cash position |
323,029 |
351,827 |
316,376 |
321,109 |
314,644 |
353,537 |
386,110 |
377,407 |
18% |
(2)% |
|
|
Days Sales Outstanding (days - end of month) (1) |
56 |
57 |
|||||||||
|
(1) Due to the conversion from IFRS (euros) to U.S. GAAP (U.S. dollars), the Days Sales Outstanding for historic quarters has not been recalculated and is not available. |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/criteo-reports-strong-results-for-the-second-quarter-2016-300308144.html
SOURCE Criteo S.A.