Criteo S.A.

Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After the prepared remarks, there will be an opportunity to ask questions. To ask a question, please press star then one. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Edward LaSalle, Senior Vice President, Market Relations and Capital Markets. Please go ahead.

Thanks Rocco and good morning everyone. Welcome to Creo's third quarter 2021 earnings call. We hope you're all doing well today. Joining us from our global headquarters in Paris today are CEO Megan Clarkin and CFO Sarah Glickman. Todd Parsons, the chief product officer also in Paris, will join as well for Q&A. As usual, you'll find our investor deck on our website now, as well as a script and transcript after the call. Before we get started, I'd like to remind you that our remarks today will include forward-looking statements, which reflect CREO's judgment, assumptions, and analysis only as of today. Our actual results may differ materially from current expectations based on a number of factors affecting CREO's business. We do not undertake any obligation to update any forward-looking statements discussed today, except as required by law. For more information, please refer to the risk factors discussed in our earnings release, as well as the most recent forms 10-K and 10-Q filed with ESC. We'll also discuss non-GAAP measures of our performance. Definitions and reconciliations to the most directly comparable GAAP metrics are included in our earnings release published earlier today. Finally, unless otherwise stated, all growth comparisons made during this call are against the same period in the prior year. With that, let me now hand it over to Megan.

Thanks Ed and good morning everyone and thank you all for joining us today. I'm particularly pleased to announce our Q3 results so close to my second anniversary with Criteo. We delivered yet another strong quarter of double digit growth and high profitability above the high end of our guidance. The sustained momentum in our business and company transformation reflects our steady progress and delivery on the strategy that we've laid out and on each of our strategic pillars. We continue to develop our commerce media platform and strengthen our first-party data capabilities, positioning us to drive sustainable growth and long-term shareholder value. On our call today, I'll discuss our commerce media platform progress, provide additional color on our expected business resilience with regards to Apple's App Tracking Transparency or ATT, and talk about our key highlights in the third quarter as we continue to deliver against our key priorities. Sarah will then cover our third quarter performance in more detail and discuss our financial outlook. Let me start with an overview of commerce media vision and progress. As you know, Criteo focuses on commerce media, the future of digital advertising that leverages commerce data and machine learning to target consumers throughout their shopping journey. We differentiate ourselves by delivering the best performing commerce audiences at scale for the marketers and media owners that we serve on the open internet. Our commerce media platform offers a holistic suite of solutions that activate the world's largest set of commerce data for first party based marketing and monetization. Similar to the proven playbook exemplified by the walled gardens, we're able to identify, reach, and monetize highly relevant consumers to drive $40 billion of commerce outcomes for our 22,000 marketers, a number that continues to grow. And thousands of media owners we have direct access to, including product consideration and sales for marketers like New Balance and Macy's. and rich ad revenue for media owners like Yahoo Japan or Carrefour and Retail Media. Driving the best commerce audiences requires rare assets and capabilities in data, media and AI. It's a combination of our unique data, media access, AI expertise and measurement capabilities that enables us to transform large crowds of generic consumers into highly relevant, high performing commerce audiences. with a global consumer reach of 650 million daily active users, huge scale in commerce data with first-party data from 22,000 customers, and unique access to over $900 billion of e-commerce sales, a differentiated retail media offering working with various top 25 retailers in the US and in Europe, and 15 years of expertise in commerce-focused AI, We're already a global powerhouse in commerce media with a strong first mover advantage. Our total addressable market is expected to reach $100 billion by 2024, growing 22% per annum compared to our serviceable market last year. We're laser focused on executing on this huge opportunity while continuing to gain share across all our existing markets. While our team has done great work already, we still have a lot to do. We continue to focus on growing our customer base, broadening our direct supply and first party media network, and strengthening our first party data set. I now want to take a moment to provide additional color on our expected business resilience with regards to Apple's ATT, given the recent focus on it. It's important to note that our business is much more orientated towards web-based advertising than apps. While we do target in apps, this is a small part of our business. As a result, we believe we're much more insulated from the overall impact of Apple's ATT than large mobile-first app players. Our retail media onsite business does not rely on any third-party identifier and is therefore not impacted by Apple's ATT. Importantly as well, our total exposure to Apple users in our marketing solutions business across both web and app is limited to less than 10% of revenue ex-tech as of October 2021, including about 4% on app. As part of our commitment to transparency with our shareholders, The expected impact from ATT and iOS 15 changes is already reflected in the $55 million privacy and identity impact for 2021 that we have previously communicated to the market and that Sarah will comment on shortly. While Apple's changes make it harder for marketers to gain access to the data that enables tracking and affects media owners' ability to best understand and serve a consumer, This serves as an opportunity for us as we serve the market to offer alternatives. We've been working on alternative solutions to iOS and Chrome for over two years and are confident in our position today. To say this another way, we started our transformation journey years ago and believe we're ahead in the race to drive superior performance in environments deprived of third-party identifiers. Our commerce media platform built on our first party media network allows us to collect alternative addressable identifiers to build privacy by design audiences and drive commerce outcomes on inventory consumed by Apple users. In addition, with broad reach of 650 million daily active users globally, we engage consumers not just on their Apple device, but in the multiple environments in which they interact. In the US alone, our largest single market and the biggest advertising market in the world, we reach over 50% of the US population on par with Facebook's app. This means that we have plenty of opportunities to reach and engage consumers along their shopping journey. Shifting to our third quarter highlights. We continue to deliver against our three strategic priorities of growth, execution, and first-party data. First, growth. We achieved double-digit growth for the second consecutive quarter, driving revenue XTAC up 14% at constant currency. We delivered the highest growth in our new solutions in four quarters at plus 66% And we're pleased that our new solutions now represent 28% of our total business, up three points compared to Q2. This fast growth in our solutions is accelerating our revenue diversification, a key pillar of our transformation. Second, execution. Our team continues to execute steadily with grit, focus, and conviction across our entire solutions portfolio for marketers and media owners. As I've said every quarter, we're committed to maintaining a high say-do ratio in everything that we do. Marketing solutions perform strongly, largely driven by solid growth with retail strategic customers like Macy's and Bonpre. We also experience strength in our core clients' spend and a solid retargeting business. Retargeting remains healthy, growing 1% despite the expected impact from identity restrictions. Excluding incremental identity headwinds, retargeting actually grew 10%. Within marketing solutions, growth in our new solutions accelerated to 68%, up 16 points since Q2, with growing contribution from our agency partners. Audience-first targeting is a growing area of focus for us, enjoying steady momentum with both our retailer and brand customers and the agencies they partner with. Growth in our audience-first targeting solutions accelerated 18 points compared to Q2 to close to 50% as marketers increasingly spend across the entire marketing funnel with us. Omnichannel, our platform that helps marketers optimize their marketing investments across online and offline, now represents 20% of our new solutions business within our marketing solutions portfolio, growing about 140%. We see increased traction with customers willing to target consumers everywhere and build the online and offline worlds as e-commerce remains strong and economies increasingly reopen. Lastly, we're launching very exciting tests of our new shoppable video ads offering that Todd mentioned at our Investor Day. This opportunity is very compelling for our marketing clients and for us, and we're encouraged by the early results. In retail media, we see accelerating momentum as well. We delivered 65% growth in revenue XTAC, accelerating by 16 points versus Q2. Year to date, retail media has grown an impressive 70%, accelerating both on a one-year and two-year basis. We see continued momentum in our on-site business, largely driven by the growing network effects of our retail media platform, which provides our unified retail media offering for brands and retailers on a single platform. Close to 80% of our retail media business in the US already goes through RMP. We had stronger growth with our top US retailer customers, adding 10 new retailers globally and launched 10 retailers on the digital media platform, including Walmart Canada, Best Buy, and Douglas. We're also thrilled to have our retail media platform power the recently announced retail media programs of large US players, including Ulta Beauty and Lowe's. In addition, our marketplace business delivered solid performance during the quarter, accelerated by our successful acquisition of Mabaya, performing in line with our expectations. And we continue to make good progress off-site business, which allows brands to extend their commerce audiences beyond retailer properties to the open internet, with a strong retailer pipeline expected to drive acceleration and Q4. Our third strategic priority is first-party data. As we said before, connecting first-party supply will become the only way for both marketers and media owners to effectively advertise and monetize commerce audiences on the open internet once the industry finally moves beyond third party cookies. We continue to make progress in securing first party data via retail media. Our commerce media platform strategy is anchored in our retail media onsite business, which is entirely built on first party data. and does not rely on any type of third-party identifiers, whether cookies or IDFAs, further strengthening our moat and our lead around first-party data. We also continue to make progress in securing first-party data via our first-party media network, working directly with media owners like ABC and the LA Times to power first-party data media buying on the open internet. Today, approximately 60% of our daily active users on the web are addressable through media owners we have direct access to. Building upon our legacy direct bidder product, we're actively increasing our direct integrations with publishers, including as part of our evolution to a full supply-side platform. Our key focus remains the quality of our direct integrations with media owners, ensuring key deep relationships with the most strategic players. That's why in every market we typically ensure direct paths to the top 100 publishers, giving marketers advantaged and transparent buying on the properties that matter most to their business success. And with our commerce media platform, we also deepen our relationships with the direct publishers by expanding their inventory reach to key consumers through new sources of marketer demand and greater publisher monetization and addressability. Last quarter, we discussed our initiative to bring third-party demand through the Criteo SSP and broaden our buying scale with our direct media partners. With over 550 global publishers already signed up, Our SSP allows us to leverage our commerce data on a larger scale, bring our direct publishers larger buys of supply executed through Criteo to other third-party DSP, and secure long-term direct access to quality media. In short, with retail media's unique first-party data assets and our larger media purchasing scale, including through more direct media integrations, We're uniquely positioned alongside the walled gardens to drive the best commerce audiences to the open internet based on first party data. In closing, we're very pleased with the sustained momentum in our business and company transformation. We're making steady progress and delivering with focus on each of our key priorities of growth, execution, and first party data. We continue to expand our commerce media platform to drive the best commerce audiences on the open internet, further positioning us for sustainable growth and long-term shareholder value. With that, I'll turn over to Sarah to discuss our financial performance and guidance. Sarah.