Criteo S.A.

SVP, Market Relations, and Capital Markets. Please go ahead.

Thank you, Kate. Good morning, everyone, and welcome to Cradle's fourth quarter and fiscal year 2021 earnings call. We hope you're all doing well today. Joining us on the call are Chief Executive Megan Clarkin, Chief Product Officer Todd Parsons, and Chief Financial Officer Sarah Glickman. As usual, you'll find our investor presentation 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 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. Except as required by law, we do not undertake any obligation to update any forward-looking statements discussed today. For more information, please refer to the risk factors discussed in our earnings release as well as our most recent Form 10-K and 10-B with the FCC. 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 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.

Well, thanks, Ed, and good morning, everyone. 2021 was a pivotal year for Criteo as we worked hard to execute against our strategic transformation plan. I'm proud of the tremendous progress that we've made, and I'm bullish about what lies ahead. I want to thank all of our employees across the globe for their relentless dedication to drive innovation and change for our clients, enabling us to deliver our impressive performance and reposition our business to lead the future of ad tech. Today I'll cover three main topics on the call. First, the strong progress we've made in 2021. Second, the ambitious goals that drive our bold vision and commerce media. And third, the relentless focus that we put on execution. Todd will then present our product and go to market priorities for 2022. And Sarah will discuss our performance highlights and our guidance for the year. Let's start with our progress on our transformation. Today, we believe we've turned the corner and entered a new stage, one of growth and of scale. From a declining pure play retargeting business, we've turned around to become a strategically diversified and growing business, and our commerce media strategy has come to life. This is evidenced by our double-digit growth in 2021, which we believe we can sustain for the years to come. In 2021, we continue to build scale across our business, as shown by the 19% growth in the annual media spend we activate for our clients, reaching $2.7 billion in 2021. We've capitalized on our strong first mover advantage on commerce media, our rapidly expanding retail media footprint, and fast-growing global consumer reach to position Criteo as an ad tech leader differentiated by commerce media. We're building on multiple strong differentiators to sustain and strengthen our lead in commerce media. These include 685 million daily active users who are online to buy products and services amongst other activities. Our large scale and first party data from 22,000 clients, unique access to over a trillion dollars of e-commerce sales, our differentiated retail media offering powering over 50% of the top 25 retailers in the US and Europe and 16 years of commerce-focused AI expertise. We have all the right assets to accelerate our strategic plans and be the go-to for commerce and retail media for the open internet. Talking about Criteo's strategy, let me take a moment to remind you of the goals guiding our ambitions in commerce media. At Criteo, we believe that we invented commerce media, which we first introduced in the fall of 2020, E-commerce continues to grow in the form of sales dollars and percentage of total retail sales and commerce media takes advantage of this by bringing advertising spend into the digital stores paired with advertising campaign run against off-site media to maximize marketing spend and drive significant commerce outcomes. We combine large-scale commerce data and intelligence to deliver rich consumer experiences and engaging consumers from discovery all the way through to purchase to drive both online results and in-store visits and sales. With Commerce Media, we help all parties increase digital advertising returns by informing marketing decisions, improving targeting, and creating efficient, effective ads. We bring consumers to brands, brands to retailers, and audiences to publishers. In short, we're creating an open marketplace where we connect consumers, marketers, and media owners to drive commerce outcomes with control and transparency. We don't believe that anyone else is doing this across the open internet like we are. Our commerce media platforms opens up a potential $100 billion TAM by 2024, more than doubling the market we served prior to our transformation. We believe a number of strong secular industry tailwinds support our massive opportunity, including the rapid surge of e-commerce since the beginning of the pandemic, the huge potential that having access to first-party data unlocks for marketers and media owners, and the critical need retailers have to partner with technology and media companies. According to multiple industry experts, retail media has become the number one secular growth trend in digital advertising today, overtaking search and social. And as marketers respond to the consumer shift to e-commerce, which expected to grow double digits again in 2022, traditional trade marketing dollars used for bricks and mortar install promotions are rapidly moving to digital, allowing retailers and brands to personalize promotions and ad placements for consumers, for customers, and drive sales both online and in store. This shift represents a market opportunity of an additional $80 billion in TAM. When adding the full potential of online trade marketing, which we're poised to capitalize on, our total addressable market reaches $180 to $200 billion. Leveraging these powerful trends and opportunities, as well as our recently signed acquisition of IPONweb, will enable us to further scale to meet the demand of commerce media capabilities across the open internet. In fact, certain industry experts already view Criteo as a walled garden for commerce media. This is ironic, but if this means providing commerce media solutions to everyone by creating commerce connections and delighting consumers, then we'll take it. Looking at 2021 in the context of our bold vision, We delivered on all of our key milestones around growth, execution, and first-party data, starting with growth. We delivered double-digit growth above our guidance in 2021 of 11% at constant currency on a contribution XTAC basis, which is previously called revenue XTAC. Our fourth quarter marked the fourth consecutive quarter of contribution XTAC growth. We remained laser-focused on execution. In 2021, We accelerated our business diversification with non-targeting products representing 32% of contribution XTAC in our fourth quarter and close to 30% in 2021, up from 19% a year ago. Criteo is no longer a single product company. We're the third of our live clients using more than one Criteo product. In terms of client count, this is 17% more than the year before. demonstrating that our broad commerce media platform enables our clients to market and monetize their digital assets up and down the marketing funnel. In turn, this enables us to grow our business in a more balanced way across our portfolio. Our growth is also well balanced between existing and new clients. We added hundreds of net new clients across all solutions. Importantly, we benefit from fast increasing traction and upselling and cross-selling our solution to existing clients. For example, our commerce media platform is supporting multiple brands in Denone's portfolio to drive product awareness, engage off-site and in-store customers online, and generate sales. We're leveraging our full funnel capabilities for these brands with a holistic audience approach, integrating many of our solutions across marketing solutions and retail media. Another example includes a large New York-based omnichannel retailer that is constantly broadening their partnership with us through time and is using our audience-first targeting and retargeting along with our omnichannel capabilities and, of course, retail media. In 2021, this retailer's always-on strategies and new product adoption across our portfolio led to a 40% increase in our business with them. This is the commerce media effect. More specifically, retail media remains a powerful growth engine for us as we continue to own this exciting space. Our platform offers a differentiated self-service interface to both retailers and brands and drives positive network effects for all parties. In 2021, we expanded our platform adoption with large retailers including Lowe's, Carrefour, Best Buy, Nordstrom, Michaels, Costco, and Douglas, and started off-site campaigns for Lenovo, Best Buy, and Walmart Mexico. We've also invested in multiple growth areas to position retail media to meet new client needs, including retailer marketplaces, with new clients like Freeway and new campaigns with Sam's Club, Meyers, Amaya, and Metro. And we're thrilled to have recently signed a three-year global partnership with GroupM, the world's leading media investment company, part of WPP, to accelerate the demand and supply growth of retail media, while empowering GroupM's agency around the world with incentives and first-to-market opportunities within our retail media ecosystem and platform globally. This is our first global retail media agreement with a major agency holding company and further positions us as the retail media partner of choice on the open internet. When it comes to audience-first targeting, we're capitalizing on fast-growing opportunities. We saw strong renewal rates and budget increases in the back half of the year. We launched hundreds of contextual ad campaigns and saw good traction in online video with exciting results from our new shoppable video ads product. Our omnichannel solution enabling retailers to link their offline commerce data and online consumer identities grew by triple digits again in 2021, providing us with another strong layer of differentiation in the marketplace. And finally, on first-party data, we've made significant strides to solidify Credio's leadership position. Once the industry finally moves beyond third-party identifiers, our ability to connect first-party data from the supply side with first party data from the demand side should provide a crucial advantage to effectively find and monetize commerce audiences on the open internet. With this key objective in mind, we believe our pending acquisition of IPONweb will greatly enhance our direct integration with publishers and accelerate the interoperability of first party data between demand and supply. This capability is a key differentiator for the commerce media platform. Our focus is on removing platform fatigue for our clients who are required to extend themselves across more and more DSPs and SSPs as the environment becomes more segmented and the threat of third party identifies disappearing looms. All of our 2021 achievements would not have been possible without our people who are our greatest asset to drive Credio's long-term success. Investing in talent was one of our top priorities in 2021 and will remain front and center. Our number of employees grew by 7% in 2021, showing our differentiated employer value proposition and our strong innovative culture. Every day we celebrate who we are through our diverse and inclusive culture, our commitment to the rights of people and to the planet. In 2021, we achieved gender pay parity. We extended our parental leave to be inclusive of our diverse workforce, and we saw some 1,500 Criteos, that's over half our company, volunteer across seven different employment resource groups with passion. We're delighted that 100% of our data center energy is now using renewable energy sources or offset by certificates. To get even more carbon, we worked with Tree Nation to plant over 7,000 trees in 2021, an effort that will accelerate. I'm passionate about this subject and will continue to present Criteo as a poster child for what's right. As we focus on 2022, we'll be keeping you updated through a new set of strategic pillars, which will be consistent throughout the year. Over the past year, we prioritized around growth, execution, and first party data. Going forward, We're evolving those priorities to focus on integration, differentiation, and scale. And firstly, integration. Now more than ever, our culture of high performance and accountability will be instrumental in achieving our growth ambitions. To further scale our leading position and accelerate the deployment of our commerce media platform, we intend to continue to invest in high growth areas and hire or acquire strong talent. Our pending acquisition of iPon Web and the integration of this exciting asset is critical, as is the opportunity for us to unlock the power of commerce of the commerce media platform through a more integrated go-to-market pivot. Our commercial push in 2022 is critical, and you'll see more from us on client segmentation, product mix talent, and more integrated go-to-market initiatives. Second, differentiation is what makes us unique. and the right choice for clients. You'll see us focusing on things that set us apart, from the assets that we continue to build on to the product functions and features to our tech investments and our people. We'll continue to differentiate to create opportunities for our clients and for ourselves. And finally, scale is critical to deliver sustainable growth. You'll see us focusing on making choices that enable us to scale, from partnerships that we form to investments and efficiency plays Everything we do is grounded on our ability to make it scale. In closing, we expect to deliver double-digit growth again in 2022 with continued growth in retail media and marketing solutions. The accelerated shift towards e-commerce and digital advertising is a macro trend that will continue to grow. We're well positioned to help retailers target their customers anywhere, including to bridge offline commerce with online consumers. Commerce media is the most important secular growth trend in the entire digital industry and we're confident that our strong differentiated offering will allow us to continue to gain share there. In pursuing our scale priority, we'll focus on improving our efficiencies across our business, building for growth and gaining share on our existing market opportunity. We believe we're heading into 2022 with a clear strategy and a great plan a focus on deeper integration, differentiation and scale with world-class talent, commerce media assets, and strong execution momentum. With that, I'm going to turn the call over to Todd, who will provide an update on our product and go-to-market priorities for this year. Todd.