Criteo Reports Strong Results For The First Quarter 2016
NEW YORK, May 4, 2016 /PRNewswire/ -- Criteo S.A. (NASDAQ: CRTO), the performance marketing technology company, today announced financial results for the first quarter ended March 31, 2016.
- Revenue increased 36% (or 39% at constant currency1) to $401 million.
- Revenue excluding Traffic Acquisition Costs, or Revenue ex-TAC, grew 37% (or 41% at constant currency) to $162 million, or 40.5% of revenue.
- Net Income increased 36% to $19 million.
- Adjusted EBITDA grew 54% (or 56% at constant currency) to $49 million, or 12.2% of revenue.
- Adjusted Net Income per diluted share was $0.43.
"We are making advertising accountable to performance metrics through innovation and technology," said Eric Eichmann, CEO. "2016 is off to a strong start and our pipeline of exciting new products will continue to fuel high growth."
"We delivered fast growth and increased profitability," said Benoit Fouilland, Chief Financial Officer. "This combination remains a unique feature of our business model."
Operating Highlights
- Over 50% of our business was generated on mobile ads in the first quarter, a key milestone for us.
- Existing clients at the end of Q1 2015 generated 21% more Revenue ex-TAC at constant currency in Q1 2016, demonstrating our ability to drive continued revenue expansion within our client base.
- We added over 760 net clients in Q1, the second largest quarterly addition in our history, while maintaining client retention at 90%.
- Users matched through our Universal Match solution generated 40% of our Revenue ex-TAC in Q1, reflecting growing adoption of our solution and the high value of matched users.
- We deployed many new clients onto Facebook via our integration with dynamic product ads in Q1. Today, close to 5,000 advertisers are live on DPA on mobile and desktop .
Revenue ex-TAC
Revenue ex-TAC grew 37%, or 41% at constant currency, to $162 million (Q1 2015: $118 million). This increase was primarily driven by the continued roll-out of our technology innovations across all devices including mobile, the addition of the second largest quarterly number of new clients and the continued expansion of our publisher relationships.
- In the Americas region, Revenue ex-TAC grew 43%, or 48% at constant currency, to $56 million and represented 35% of total Revenue ex-TAC.
- In the EMEA region, Revenue ex-TAC grew 26%, or 30% at constant currency, to $68 million and represented 42% of total Revenue ex-TAC.
- In the Asia-Pacific region, Revenue ex-TAC grew 53%, or 52% at constant currency, to $38 million and represented 23% of total Revenue ex-TAC.
Revenue ex-TAC margin as a percentage of revenue was 40.5%, 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 54%, or 56% at constant currency, to $49 million (Q1 2015: $32 million). This increase in Adjusted EBITDA is primarily the result of the strong Revenue ex-TAC performance in the quarter. We incurred slightly lower than anticipated expenses, primarily related to hosting, data and various other operating expenses. Approximately a third of such lower expenses represent savings.
Adjusted EBITDA margin as a percentage of revenue improved 140 basis points to 12.2% (Q1 2015: 10.8%).
Operating expenses increased 32% to $116 million (Q1 2015: $88 million). Operating expenses, 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-GAAP Operating Expenses, increased 30% to $104 million. This increase is primarily related to the year-over-year growth in headcount in Research and Development (48%), Sales and Operations (23%) and General and Administrative (35%), as we continued to scale the entire organization.
Non-GAAP Operating Expenses as a percentage of revenue decreased by over 120 basis points to 25.8% (Q1 2015: 27.0%).
Net Income and Adjusted Net Income
Net income increased 36% to $19 million (Q1 2015: $14 million). Net income available to shareholders of Criteo S.A. was $17 million, or $0.26 per share on a diluted basis (Q1 2015: $13 million, or $0.20 per share on a diluted basis).
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, increased 35% to $28 million, or $0.43 per share on a diluted basis (Q1 2015: $21 million, or $0.32 per share on a diluted basis).
Cash Flow and Cash Position
Cash flow from operating activities was $19 million (Q1 2015: $41 million).
Total cash and cash equivalents were $386 million as of March 31, 2016 (December 31, 2015: $354 million).
Business Outlook
The following forward-looking statements reflect Criteo's expectations as of May 4, 2016.
Second Quarter 2016 Guidance:
- We expect Revenue ex-TAC to be between $158 million and $162 million.
- We expect Adjusted EBITDA to be between $32 million and $36 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 second quarter 2016 assumes the following exchange rates for the main currencies impacting our business: a U.S. dollar-euro rate of 0.885, a U.S. dollar-Japanese Yen of 110, a U.S. dollar-British pound rate of 0.70 and a U.S. dollar-Brazilian real rate of 3.56.
The above guidance assumes no acquisitions are completed during the second quarter ending June 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 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 share-based compensation expense, service costs (pension) 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 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 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 June 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, May 4, 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 2,000 employees in 31 offices across the Americas, EMEA and Asia-Pacific, serving 11,000 advertisers worldwide and with direct relationships with 16,000 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, |
March 31, | ||||
|
2015 |
2016 | ||||
|
(in thousands) | |||||
|
Assets |
|||||
|
Current assets: |
|||||
|
Cash and cash equivalents |
$ 353,537 |
$ 386,110 | |||
|
Trade receivables, net of allowances |
261,581 |
262,524 | |||
|
Deferred tax assets - current |
— |
— | |||
|
Current tax assets |
2,714 |
2,977 | |||
|
Other current assets |
45,582 |
57,706 | |||
|
Total current assets |
663,414 |
709,317 | |||
|
Property, plant and equipment, net |
82,482 |
85,845 | |||
|
Intangible assets, net |
16,470 |
17,024 | |||
|
Goodwill |
41,973 |
42,736 | |||
|
Non-current financial assets |
17,184 |
16,880 | |||
|
Deferred tax assets |
20,196 |
21,911 | |||
|
Total non current assets |
178,305 |
184,396 | |||
|
Total assets |
$ 841,719 |
$ 893,713 | |||
|
Liabilities and shareholders' equity |
|||||
|
Current liabilities: |
|||||
|
Trade payables |
$ 246,382 |
$ 241,119 | |||
|
Contingencies |
668 |
688 | |||
|
Current tax liabilities |
15,365 |
13,288 | |||
|
Financial liabilities - current portion |
7,156 |
6,202 | |||
|
Other current liabilities |
88,269 |
95,081 | |||
|
Total current liabilities |
357,840 |
356,378 | |||
|
Deferred tax liabilities |
139 |
410 | |||
|
Retirement benefit obligation |
1,445 |
1,900 | |||
|
Financial liabilities - non current portion |
3,272 |
3,201 | |||
|
Total non-current liabilities |
4,856 |
5,511 | |||
|
Total liabilities |
362,696 |
361,889 | |||
|
Commitments and contingencies |
|||||
|
Shareholders' equity: |
|||||
|
Common shares, €0.025 per value, 60,902,695 and 62,470,881 shares authorized, issued and outstanding at December 31, 2014 and 2015, respectively. |
2,052 |
2,063 | |||
|
Additional paid-in capital |
425,220 |
438,945 | |||
|
Accumulated other comprehensive income (loss) |
(69,023) |
(48,904) | |||
|
Retained earnings |
116,076 |
133,206 | |||
|
Equity - attributable to shareholders of Criteo S.A. |
474,325 |
525,310 | |||
|
Non-controlling interests |
4,698 |
6,514 | |||
|
Total equity |
479,023 |
531,824 | |||
|
Total equity and liabilities |
$ 841,719 |
$ 893,713 | |||
|
CRITEO S.A. | |||||||
|
Consolidated Statement of Income | |||||||
|
(U.S. dollars in thousands, except share and per share data) | |||||||
|
(unaudited) | |||||||
|
Three Months Ended |
|||||||
|
March 31, |
|||||||
|
2015 |
2016 |
YoY | |||||
|
(in thousands, except share and per share data) |
|||||||
|
Revenue |
$ 294,172 |
$ 401,253 |
36 % | ||||
|
Cost of revenue |
|||||||
|
Traffic acquisition cost |
$ (175,888) |
$ (238,755) |
36 % | ||||
|
Other cost of revenue |
$ (12,969) |
$ (18,338) |
41 % | ||||
|
Gross profit |
$ 105,315 |
$ 144,160 |
37 % | ||||
|
Operating expenses: |
|||||||
|
Research and development expenses |
$ (17,846) |
$ (27,162) |
52 % | ||||
|
Sales and operations expenses |
$ (53,083) |
$ (64,473) |
21 % | ||||
|
General and administrative expenses |
$ (17,546) |
$ (24,737) |
41 % | ||||
|
Total Operating expenses |
$ (88,475) |
$ (116,372) |
32 % | ||||
|
Income from operations |
$ 16,840 |
$ 27,788 |
65 % | ||||
|
Financial income (expense) |
$ 3,920 |
$ (1,317) |
(134)% | ||||
|
Income before taxes |
$ 20,760 |
$ 26,471 |
28 % | ||||
|
Provision for income taxes |
$ (7,143) |
$ (7,944) |
11 % | ||||
|
Net Income |
$ 13,617 |
$ 18,527 |
36 % | ||||
|
Net income available to shareholders of Criteo S.A |
$ 12,982 |
$ 17,131 |
|||||
|
Net income available to non-controlling interests |
$ 635 |
$ 1,396 |
|||||
|
Weighted average shares outstanding used in computing |
|||||||
|
per share amounts: |
|||||||
|
Basic |
61,174,168 |
62,610,013 |
|||||
|
Diluted |
64,741,942 |
64,841,134 |
|||||
|
Net income allocated to shareholders per share: |
|||||||
|
Basic |
0.21 |
0.27 |
|||||
|
Diluted |
0.20 |
0.26 |
|||||
|
CRITEO S.A. | ||||
|
Consolidated Statement of Cash Flows | ||||
|
(U.S. dollars in thousands) | ||||
|
(unaudited) | ||||
|
Three Months Ended | ||||
|
March 31, | ||||
|
2015 |
2016 | |||
|
Net income |
$ 13,617 |
$ 18,527 | ||
|
Non-cash and non-operating items |
21,882 |
29,506 | ||
|
- Amortization and provisions |
8,262 |
13,180 | ||
|
- Share-based payment expense |
6,318 |
8,370 | ||
|
- Net gain or loss on disposal of non-current assets |
3 |
— | ||
|
- Interest paid |
2 |
2 | ||
|
- Non-cash financial income and expenses |
153 |
10 | ||
|
- Change in deferred taxes |
31 |
(1,138) | ||
|
- Income tax for the period |
7,113 |
9,082 | ||
|
Changes in working capital related to operating activities |
8,905 |
(17,140) | ||
|
- (Increase)/decrease in trade receivables |
(9,421) |
4,758 | ||
|
- Increase/(decrease) in trade payables |
23,937 |
(13,906) | ||
|
- (Increase)/decrease in other current assets |
(10,639) |
(10,368) | ||
|
- Increase/(decrease) in other current liabilities |
5,028 |
2,376 | ||
|
Income taxes paid |
(3,397) |
(11,986) | ||
|
CASH FROM OPERATING ACTIVITIES |
41,007 |
18,907 | ||
|
Acquisition of intangible assets, property, plant and equipment |
(11,528) |
(13,615) | ||
|
Proceeds from disposal of intangible assets, property, plant and equipment |
— |
— | ||
|
Net change in accounts payable related to intangible assets, property, plant and equipment |
(1,334) |
1,507 | ||
|
FREE CASH FLOW |
28,145 |
6,799 | ||
|
Investments, net of cash acquired |
(17,209) |
— | ||
|
Change in other non-current financial assets |
(3,751) |
781 | ||
|
CASH USED FOR INVESTING ACTIVITIES |
(33,822) |
(11,327) | ||
|
Issuance of long-term borrowings |
827 |
764 | ||
|
Repayment of borrowings |
(3,277) |
(1,503) | ||
|
Proceeds from capital increase |
2,771 |
5,476 | ||
|
Change in other financial liabilities |
(1,000) |
— | ||
|
CASH FROM (USED FOR) FINANCING ACTIVITIES |
(679) |
4,737 | ||
|
CHANGE IN NET CASH AND CASH EQUIVALENTS |
6,506 |
12,317 | ||
|
Net cash and cash equivalents at beginning of period |
351,827 |
353,537 | ||
|
Effect of exchange rates changes on cash and cash equivalents |
(41,957) |
20,256 | ||
|
Net cash and cash equivalents at end of period |
$ 316,376 |
$ 386,110 | ||
|
CRITEO S.A. | |||||||||
|
Reconciliation of Revenue ex-TAC by Region to Revenue by Region | |||||||||
|
(U.S. dollars in thousands) | |||||||||
|
(unaudited) | |||||||||
|
Three Months Ended |
|||||||||
|
March 31, |
|||||||||
|
Region |
2015 |
2016 |
YoY Change |
YoY Change at | |||||
|
Revenue |
|||||||||
|
Americas |
$ 100,624 |
$ 147,174 |
46 % |
51 % | |||||
|
EMEA |
132,208 |
159,405 |
21 % |
24 % | |||||
|
Asia-Pacific |
61,340 |
94,674 |
54 % |
53 % | |||||
|
Total |
294,172 |
401,253 |
36 % |
39 % | |||||
|
Traffic acquisition costs |
|||||||||
|
Americas |
(61,244) |
(90,929) |
48 % |
52 % | |||||
|
EMEA |
(78,158) |
(91,185) |
17 % |
20 % | |||||
|
Asia-Pacific |
(36,486) |
(56,641) |
55 % |
54 % | |||||
|
Total |
(175,888) |
(238,755) |
36 % |
38 % | |||||
|
Revenue ex-TAC |
|||||||||
|
Americas |
39,380 |
56,245 |
43 % |
48 % | |||||
|
EMEA |
54,050 |
68,220 |
26 % |
30 % | |||||
|
Asia-Pacific |
24,854 |
38,033 |
53 % |
52 % | |||||
|
Total |
$ 118,284 |
$ 162,498 |
37 % |
41 % | |||||
|
(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 | |||
|
March 31, | |||
|
2015 |
2016 | ||
|
Net income |
$ 13,617 |
$ 18,527 | |
|
Adjustments: |
|||
|
Financial (income) expense |
(3,920) |
1,317 | |
|
Provision for income taxes |
7,143 |
7,944 | |
|
Share-based compensation expense |
6,317 |
8,370 | |
|
Research and development |
1,478 |
2,402 | |
|
Sales and operations |
3,454 |
3,390 | |
|
General and administrative |
1,385 |
2,578 | |
|
Service cost-pension |
112 |
129 | |
|
Research and development |
42 |
52 | |
|
Sales and operations |
39 |
34 | |
|
General and administrative |
31 |
43 | |
|
Depreciation and amortization expense |
8,428 |
12,516 | |
|
Cost of revenue |
5,971 |
8,220 | |
|
Research and development |
1,144 |
2,007 | |
|
Sales and operations |
992 |
1,771 | |
|
General and administrative |
321 |
518 | |
|
Acquisition-related deferred price consideration |
109 |
40 | |
|
Research and development |
109 |
40 | |
|
Sales and operations |
— |
— | |
|
General and administrative |
— |
— | |
|
Total net adjustments |
18,189 |
30,316 | |
|
Adjusted EBITDA |
$ 31,806 |
$ 48,843 | |
|
(1) We define Adjusted EBITDA as our consolidated earnings before financial income (expense), income taxes, depreciation and amortization, adjusted to eliminate the impact of share-based compensation expense, service costs (pension) and acquisition-related 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 share-based compensation expense, service costs (pension) and acquisition-related 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 | |||
|
March 31, | |||
|
2015 |
2016 | ||
|
Share-based compensation expense |
|||
|
Research and development |
$ 1,478 |
$ 2,402 | |
|
Sales and operations |
3,454 |
3,390 | |
|
General and administrative |
1,385 |
2,578 | |
|
Total share-based compensation expense |
6,317 |
8,370 | |
|
Service costs - pension |
|||
|
Research and development |
42 |
52 | |
|
Sales and operations |
39 |
34 | |
|
General and administrative |
31 |
43 | |
|
Total service costs - pension |
112 |
129 | |
|
Depreciation and amortization expense |
|||
|
Cost of revenue |
5,971 |
8,220 | |
|
Research and development |
1,144 |
2,007 | |
|
Sales and operations |
992 |
1,771 | |
|
General and administrative |
321 |
518 | |
|
Total depreciation and amortization Expense |
8,428 |
12,516 | |
|
Acquisition-related deferred price consideration |
|||
|
Research and development |
109 |
40 | |
|
Sales and operations |
— |
— | |
|
General and administrative |
— |
— | |
|
Total acquisition-related deferred price consideration |
$ 109 |
$ 40 | |
|
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 | ||||
|
March 31, | ||||
|
2015 |
2016 | |||
|
Net income |
$ 13,617 |
$ 18,527 | ||
|
Adjustments: |
||||
|
Share-based compensation expense |
6,317 |
8,370 | ||
|
Amortization of acquisition-related intangible assets |
920 |
1,377 | ||
|
Acquisition-related deferred price consideration |
109 |
40 | ||
|
Tax impact of the above adjustments |
(130) |
(228) | ||
|
Total net adjustments |
7,216 |
9,559 | ||
|
Adjusted net income |
$ 20,833 |
$ 28,086 | ||
|
Weighted average shares outstanding |
||||
|
- Basic |
61,174,168 |
62,610,013 | ||
|
- Diluted |
64,741,942 |
64,841,134 | ||
|
Adjusted net income per share |
||||
|
- Basic |
$ 0.34 |
$ 0.45 | ||
|
- Diluted |
$ 0.32 |
$ 0.43 | ||
|
(1) We define Adjusted Net Income as 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 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 share-based compensation expense, amortization of acquisition-related intangible assets, acquisition-related 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 |
||||||
|
March 31, |
||||||
|
2015 |
2016 |
YoY Change | ||||
|
Revenue as reported |
$ 294,172 |
$ 401,253 |
36 % | |||
|
Conversion impact U.S. dollar/other currencies |
8,349 |
|||||
|
Revenue at constant currency |
294,172 |
409,602 |
39 % | |||
|
Traffic acquisition costs as reported |
(175,888) |
(238,755) |
36 % | |||
|
Conversion impact U.S. dollar/other currencies |
(4,638) |
|||||
|
Traffic Acquisition Costs at constant currency |
(175,888) |
(243,393) |
38 % | |||
|
Revenue ex-TAC as reported |
118,284 |
162,498 |
37 % | |||
|
Conversion impact U.S. dollar/other currencies |
3,712 |
|||||
|
Revenue ex-TAC at constant currency |
118,284 |
166,210 |
41 % | |||
|
Revenue ex-TAC/Revenue as reported |
40 % |
40 % |
||||
|
Other cost of revenue as reported |
(12,969) |
(18,338) |
41 % | |||
|
Conversion impact U.S. dollar/other currencies |
(252) |
|||||
|
Other cost of revenue at constant currency |
(12,969) |
(18,590) |
43 % | |||
|
Adjusted EBITDA |
31,806 |
48,843 |
54 % | |||
|
Conversion impact U.S. dollar/other currencies |
901 |
|||||
|
Adjusted EBITDA at constant currency |
31,806 |
49,744 |
56 % | |||
|
(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. Above is a table which 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) | ||||
|
Three Months Ended | ||||
|
March 31, | ||||
|
2015 |
2016 | |||
|
Shares outstanding as at January 1, |
60,902,695 |
62,470,881 | ||
|
Weighted average number of shares issued during the period |
271,473 |
139,132 | ||
|
Basic number of shares - Basic EPS basis |
61,174,168 |
62,610,013 | ||
|
Dilutive effect of share options, warrants, employee warrants - Treasury method |
3,567,774 |
2,231,121 | ||
|
Diluted number of shares - Diluted EPS basis |
64,741,942 |
64,841,134 | ||
|
Shares outstanding as at March 31, |
61,517,945 |
62,896,180 | ||
|
Total dilutive effect of share options, warrants, employee warrants |
7,769,195 |
7,469,069 | ||
|
Fully diluted shares as at March 31, |
69,287,140 |
70,365,249 | ||
|
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 |
YoY |
QoQ | |
|
Clients |
6,131 |
6,581 |
7,190 |
7,832 |
8,564 |
9,290 |
10,198 |
10,962 |
40 % |
7 % |
|
Revenue |
226,632 |
258,245 |
294,489 |
294,172 |
299,306 |
332,674 |
397,018 |
401,253 |
36 % |
1 % |
|
Americas |
64,349 |
78,008 |
109,543 |
100,624 |
110,872 |
124,024 |
170,133 |
147,174 |
46 % |
(13)% |
|
EMEA |
115,416 |
124,455 |
131,275 |
132,208 |
126,807 |
137,185 |
144,905 |
159,405 |
21 % |
10 % |
|
APAC |
46,867 |
55,782 |
53,671 |
61,340 |
61,627 |
71,465 |
81,980 |
94,674 |
54 % |
15 % |
|
TAC |
(134,750) |
(155,237) |
(172,538) |
(175,888) |
(177,239) |
(198,970) |
(237,056) |
(238,755) |
36 % |
1 % |
|
Americas |
(38,852) |
(47,250) |
(66,774) |
(61,244) |
(66,853) |
(75,684) |
(104,646) |
(90,929) |
48 % |
(13)% |
|
EMEA |
(67,293) |
(73,218) |
(73,264) |
(78,158) |
(73,155) |
(79,710) |
(82,905) |
(91,185) |
17 % |
10 % |
|
APAC |
(28,605) |
(34,769) |
(32,500) |
(36,486) |
(37,231) |
(43,576) |
(49,505) |
(56,641) |
55 % |
14 % |
|
Revenue ex-TAC |
91,882 |
103,008 |
121,951 |
118,284 |
122,067 |
133,704 |
159,962 |
162,498 |
37 % |
2 % |
|
Americas |
25,497 |
30,758 |
42,769 |
39,380 |
44,019 |
48,340 |
65,487 |
56,245 |
43 % |
(14)% |
|
EMEA |
48,123 |
51,237 |
58,011 |
54,050 |
53,652 |
57,475 |
62,000 |
68,220 |
26 % |
10 % |
|
APAC |
18,262 |
21,013 |
21,171 |
24,854 |
24,396 |
27,889 |
32,475 |
38,033 |
53 % |
17 % |
|
Cash flow from operating activities |
15,346 |
34,102 |
51,169 |
41,007 |
11,937 |
17,500 |
66,706 |
18,907 |
(54)% |
(72)% |
|
Capital expenditures |
14,334 |
14,880 |
12,562 |
12,862 |
18,347 |
24,066 |
19,205 |
12,109 |
(6)% |
(37)% |
|
Net cash position |
331,746 |
323,029 |
351,827 |
316,376 |
321,108 |
314,644 |
353,537 |
386,110 |
22 % |
9 % |
|
Days Sales Outstanding (days - end of month) |
56 |
|||||||||
|
(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. |
SOURCE Criteo S.A.
Share this article