Criteo S.A.

Criteo S.A. operates in the digital advertising and commerce ecosystems, connecting brands, agencies, retailers, and media owners to drive measurable business outcomes through its Commerce Intelligence Platform. The company leverages Artificial Intelligence (AI) and a vast commerce data foundation, informed by over $1 trillion ² in annual commerce transactions, to enable discovery, engagement, and conversion across the shopper journey. Criteo's technology facilitates personalized advertising and delivers targeted ads across the open internet and retailer ecosystems. The company powered over $39 billion ⁴ in commerce outcomes, activated more than $4.3 billion ⁵ of media spend, and delivered 2 trillion ⁶ targeted ads in 2025. Criteo serves approximately 17,000 ⁷ clients, with an average client retention rate of approximately 90% ⁸ over the last three years.

Criteo's core business model revolves around its Commerce Intelligence Platform, which combines scalable commerce data, broad media access, and proprietary predictive AI. The platform offers both demand-side and supply-side solutions. Revenue is generated through various pricing models, including click- and impression-based pricing, and a percentage of working media spend. The company acts as either a principal or an agent in transactions, which impacts revenue recognition on a gross or net basis. For professional services like campaign management, revenue is recognized over time.

The company reports results across two operating and reportable segments: Performance Media and Retail Media. The Performance Media segment focuses on commerce activation, monetization, and services that enable advertisers to reach and convert consumers across channels. It helps brands and agencies achieve measurable results across the full marketing funnel using outcome-based advertising powered by AI-driven Commerce Growth (managed-service) and GO (self-service) solutions. Performance Media supports objectives such as driving brand and product discovery, new customer acquisition, attracting qualified traffic, increasing conversion and sales, and strengthening customer loyalty. This segment primarily operates on a cost-per-thousand-impressions (CPM) basis, purchasing inventory programmatically.

The Retail Media segment enables retailers to generate high-margin advertising revenue from brands and agencies while helping advertisers drive product sales on retailer sites. It connects brands to shoppers at the digital point of sale through personalized ads on retailer websites (on-site) and across the open internet (off-site), with unified reporting and closed-loop measurement including product-level sales attribution. Retailers use Criteo's self-service technology to manage and monetize their audiences and ad inventory, while brands and agencies use demand tools to plan, activate, and measure campaigns. Criteo typically charges retailers a negotiated SSP fee and sometimes a technology fee, while brands pay a negotiated DSP fee. Retail Media revenue is primarily recognized on a net basis, as Criteo acts as an agent.

For the fiscal year ended December 31, 2025, Criteo reported total revenue of $1,944.9 million ¹⁰, an increase of 1% ¹¹ compared to the prior year. Gross profit increased by 7% ¹² to $1,049.4 million ¹³, resulting in a gross margin of 53.95% (calculated as $1,049.4 million / $1,944.9 million). Operating income was $202.8 million ¹⁴. Net income increased by 30% ¹⁵ to $149.4 million ¹⁶. Basic EPS was $2.73 ¹⁷ and diluted EPS was $2.64 ¹⁸. Cash and cash equivalents were $342.0 million ¹⁹. The company had no amounts drawn or outstanding under its Revolving Credit Facility as of December 31, 2025 ²⁰.

Year-over-year, total revenue increased by $11.6 million ²¹, or 1% ²² (flat on a constant currency basis) in 2025 compared to 2024. Retail Media revenue increased 2% ²³ (or 2% ²⁴ on a constant currency basis) to $263.9 million ²⁵, driven by strength in Retail Media onsite, particularly in the U.S. market, and growing network effects, partially offset by scope changes with two clients. Performance Media revenue remained flat (or decreased (1)% ²⁶ on a constant currency basis) to $1,681.0 million ²⁷, due to lower spend in AdTech services and soft retail trends, partially offset by strength in travel and marketplaces. Gross profit increased by $66.4 million ²⁸, or 7% ²⁹, primarily due to lower traffic acquisition costs. Contribution ex-TAC increased by $53.1 million ³⁰, or 5% ³¹ (3% ³² at constant currency) to $1,174.6 million ³³.

During 2025, Criteo became Google's first onsite Retail Media partner, a significant milestone for expanding advertiser reach. The company also has an integration with Shopify through a marketing application to support small and medium-sized business acquisition. Criteo partnered with Waymark to provide AI-generated video ads for clients lacking existing video assets, aiming to reduce creative production barriers. Partner-managed markets delivered solid performance, growing revenue approximately 14% ³⁴ year-over-year, with about 20% ³⁵ of eligible advertisers in these markets migrating to Criteo's GO platform. The company recorded an accelerated amortization of $7.9 million ³⁶ and a nonrecurring impairment charge of $0.9 million ³⁷ related to internally developed intangible assets following Alphabet Inc.'s decision not to deprecate third-party cookies in Chrome. A large U.S. retailer, primarily a Performance Media client, filed for bankruptcy, leading Criteo to record a full allowance for $5.9 million ³⁸ for related receivables.

Criteo's future growth is dependent on its ability to retain and scale existing clients, increase platform usage, and attract new customers, leveraging its leading position in Commerce Media with unique commerce data, deep retailer integrations, a large client base, and differentiated technology. The company aims to capture more ad budgets and market share by unifying the Commerce Media ecosystem with a multi-retailer, multi-channel, multi-format approach and providing full-funnel closed-loop measurement.

A major growth area for Criteo is the continued expansion of its Retail Media segment. In 2025, Criteo became Google's first onsite Retail Media partner, which is expected to significantly expand advertiser reach. The company also operates the world's largest independent Retail Media API program, connecting with 14 ³⁹ leading buying partners and integrating with major order management systems. Furthermore, a partnership with Mirakl Ads extends capabilities to third-party sellers and mid-to-long-tail advertisers, enabling access to new sources of demand. The Serviceable Available Market (SAM) for Retail Media, excluding Amazon and China, is projected to reach approximately $42 billion ⁴⁰ in advertising spend by 2026 and $50 billion ⁴¹ by 2027, reflecting a compound annual growth rate of about 20% ⁴². Including Amazon and China, the Total Addressable Market (TAM) is projected to reach approximately $204 billion ⁴³ by 2027.

Another significant growth vector is the expansion of its Performance Media capabilities, particularly through cross-channel and full-funnel solutions. The company's goal is to meet consumers across social and Connected Television (CTV) as key priorities to deliver measurable outcomes, broadening its addressable market and unlocking new spend sources. Expanding Commerce Audiences to include discovery audiences will allow Criteo to capture a larger share of advertising budgets. The self-service GO platform is expected to drive sustainable scale among small and mid-sized clients while reducing the cost to serve, supported by partnerships like the Shopify integration. The rise of agentic AI is viewed as a natural extension of this strategy, with Criteo positioned to support advertising integrated into evolving consumer experiences through its deep commerce data and AI infrastructure. The SAM in performance media is estimated to reach approximately $143 billion ⁴⁴ by 2026 across addressable channels.

Operationally, Criteo plans to continue investing in business growth while improving productivity and efficiency through organizational simplification and operational excellence, all while maintaining strong profitability. These initiatives are designed to drive long-term, sustainable growth by increasing automation, scaling operations, and leveraging advanced technology to streamline processes. The company's robust infrastructure continued to advance in 2025, with 11 ⁴⁵ data centers operating 27,793 ⁴⁶ servers equipped with nearly 1 million ⁴⁷ CPU cores, more than 9 million ⁴⁸ GPU cores, and over 6.8 million ⁴⁹ GiB of memory. This evolution reflects a shift towards more powerful and efficient architectures, enabling greater computational performance with fewer machines. Criteo expects its capital expenditures to remain at, or slightly above, 9% ⁵⁰ of revenue for 2026, as it plans to continue to build, reshape, and maintain additional data center equipment capacity in all regions and invest in its Commerce Intelligence Platform.

Criteo's planned capital allocation includes continued investment in research and development, with expenses totaling $283.3 million ⁵¹ in 2025. The company also has an active share repurchase program. On January 31, 2025, the Board extended the previously authorized share repurchase program to an increased amount of up to $805.0 million ⁵². During 2025, $152.1 million ⁵³ was spent on ADS repurchases. On February 6, 2026, the Board authorized an additional $154.0 million ⁵⁴, increasing the total authorized amount to up to $959.0 million ⁵⁵, with a remaining authorization of up to $200 million ⁵⁶ as of that date. The company does not anticipate paying cash dividends on its equity securities in the foreseeable future, intending to retain all available funds and future earnings to fund growth.

Management has flagged several structural headwinds and execution risks. Global economic and geopolitical conditions remained volatile in 2025, including continued inflationary pressures and high interest rates, which may negatively impact advertising demand and consumer spending. The anticipated reduction in services from a large customer, which accounted for 5% ⁵⁷ of total revenue in 2025, has been reflected in financial projections and goodwill impairment tests. Further reductions in projected revenue, margin performance, or adverse market conditions could lead to goodwill impairment. Additionally, a large U.S. retailer, primarily a Performance Media client, filed for bankruptcy, resulting in a full allowance for $5.9 million ⁵⁸ in related receivables.

Criteo faces material risks including intense competition in the digital advertising market from large, well-established companies like Amazon, Meta Platforms, Google, and Microsoft, as well as pure-play DSPs and SSPs, which could lead to increased pricing pressure, reduced fees and gross margins, and loss of market share. Regulatory and legislative developments regarding internet and online matters, particularly data privacy laws such as GDPR, CCPA, and CPRA, pose significant risks, with potential for substantial resources and expense for compliance, regulatory exposure, and fines up to €20 million ⁵⁹ or 4% ⁶⁰ of global turnover. The company has already incurred a €40.0 million ⁶¹ ($44.0 million ⁶²) sanction from the CNIL in June 2023. The ability to generate revenue is highly dependent on collecting significant amounts of data, which may be restricted by consumer choice, browser changes (e.g., Google's abandonment of third-party cookie deprecation plans in Chrome in July 2024 ⁶³ and retirement of Privacy Sandbox technologies in October 2025 ⁶⁴), and ad-blocking software. Failures in the Criteo AI Engine to accurately predict user engagement or maintain content quality could result in significant costs, lost revenue, and diminished business opportunities, especially with the growing adoption of self-service tools and the heightened risk of fraudulent activity in higher-value formats like online video and CTV. International operations expose the company to risks such as compliance with inconsistent local laws, insufficient demand/supply in specific markets, and foreign currency exchange rate fluctuations, with a hypothetical 10% ⁶⁵ decrease in the euro against the U.S. dollar potentially impacting net income by $(1,405) thousand ⁶⁶. The company is also subject to the risks and costs associated with its planned transfer of legal domicile from France to Luxembourg and a subsequent potential transfer to the United States, including additional tax liabilities in Japan and increased operating, accounting, and audit costs.

Management's message to shareholders emphasizes the company's transformation from a single-channel, managed-service point solution to a full-funnel, cross-channel, self-service commerce AI platform, aiming to drive sustainable and profitable growth. They highlight the strategic priority of investing in the fast-growing ecommerce space and broadening the value proposition to cover all marketing goals as part of the Commerce Intelligence Platform. Key strategic priorities include cross-channel expansion, particularly into social and CTV, to broaden the addressable market and unlock new spend sources; developing full-funnel capabilities to capture a larger share of advertising budgets; and scaling self-service solutions like GO to drive efficient growth among small and mid-sized clients while reducing cost to serve. Management also noted the importance of its partner ecosystem as a critical moat and value provider to clients. The overall tone is one of strategic evolution and disciplined investment to capitalize on industry shifts, while acknowledging macroeconomic uncertainties and the need to optimize the operating model and maintain strong profitability.