Criteo S.A.

Good morning and welcome to Criteo's first quarter 2024 earnings call. All participants will be in a listen-only mode. Should you need assistance, please press star, followed by number zero on your telephone keypad. After the prepared remarks, there will be an opportunity to ask questions. To ask a question, please press star, then the number one on your telephone keypad. To withdraw your question, please press star two. Please note, this event is being recorded. I would now like to turn the conference over to Melanie Dambrek, Vice President of Investor Relations, go ahead.

Good morning, everyone, and welcome to Credo's first quarter 2024 earnings score. Joining us on the call today, Chief Executive Officer, Megan Clarkin, and Chief Financial Officer, Sarah Gitman, are going to share some prepared remarks. First person, our Chief Product Officer, will join us for the Q&A session. As usual, we will find our investor presentations on our IR website now, as well as our prepared remarks and transcripts after the course. Before we get started, I would like to remind you that our remarks will include forward-looking statements which reflect Credo's judgments, assumptions, and analysis only as of today. Our actual results may differ materially from current expectations based on a number of factors affecting Credo's business. Except as required by law, we do not undertake any obligation to update any forward-looking statements For more information, please refer to the risk factors discussed in our earnings release as well as our most recent forms 10-K and 10-Q-5 with the SEC. We will 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. unless otherwise stated, all board comparisons made during this course are against the same period in a prior year. With that, let me now hand it over to Megan.

Thanks, Melanie, and good morning, everyone. Thank you for joining us today. We're off to a great start in 2024. We continue to transform our company into a commerce media powerhouse, and we're gaining more and more momentum. We delivered double-digit organic growth for the second consecutive quarter, and achieved record top line results in Q1, while nearly doubling our adjusted EBITDA from the same period last year. I'm very proud of the incredible work from our teams. These results are testament to our laser focus and steadfast execution. As we continue to make progress on our plan, we're even more excited about our future and confident that we have the right strategy to capitalize on the next wave of digital advertising and deliver value for our shareholders. We've built the only unified platform that directly connects advertisers with retailers and publishers. And we believe we've repositioned our business to be the leader, the leading ad tech player in retail media and the platform of choice for performance-based advertising. Starting with retail media. We continue to gain market share with 38% year-over-year growth and activated media spend outpacing the market. We have a leading and growing market footprint with close to 225 retailers and 2,700 brands globally. This is now miles ahead of any competitor with our scaled network of retailers becoming the obvious complement to Amazon when buying retail media. Our global presence ability to scale quickly, our end-to-end capabilities, simple-to-use products, AI-driven performance, and world-leading sales and product expertise remain key differentiators. We continue to expand our coverage. We're delighted to have extended our partnership with Walmart Connect in Guatemala, Costa Rica, Nicaragua, Honduras, and El Salvador, further broadening our retail media presence in LATAM. In the U.S., we're proud to add new retail partners, including a leading retail department store chain and a TV and online shopping platform. We also continue to win new retailers in APAC, including David Jones in Australia and drugstore chain Welsea in Japan. We're quickly ramping up our newly signed partnerships, including Albertsons, and expanding our reach into adjacent commerce verticals as exemplified by the recent addition of Ticketmaster to our platform, the world's leading ticket marketplace. We also look forward to expanding our partnership with Uber Eats as we work with them to go into new categories and add new ad formats. With our relentless focus on driving demand, or said differently, attracting advertising spend to our retailers' sites, Our access to unique and premium retail media inventory at scale has been instrumental in achieving this. We added over 100 new brands in Q1 and saw continued strong growth through our agency partners by making retail media easily accessible to them via Commerce Max. In the US alone, agency spend reached about $100 million for the first time this quarter, with 40% coming from three agency hold codes, growing by triple digits in Q1. We expect sustained momentum as our multi-year partnerships with leading agencies and brands represent hundreds of millions of dollars in spend anticipated to come through our platform in 2024 and beyond. Evidence of this can be seen with our largest brands, who are now advertising on 50% more retailer sites, than they were last year. Ecommerce Max drives demand to both retailers' own inventory and to off-site campaigns, using retailer data assets to extend their reach across open internet inventory. Fresh Direct is one of the latest retailers to participate in off-site campaigns with Ecommerce Max DSP. Further to enabling demand through direct channels via Ecommerce Max, we're also focused on indirect demand channels. While still early days, opening more channels creates further opportunities to scale. Our Commerce Grid SSP gives brands a further way to access our retailer audiences for off-site campaigns run through third-party DSPs. This means more channels for retailers to attract additional demand and more revenue opportunities. Nobody else offers such flexibility and optionality to reach the most valuable audiences and connect suppliers so efficiently with demand. In advertising, results are supported by measurement. Measurement is critical to buying and selling and helping brands and agencies understand the effectiveness of their retail media spend. In February, we gained our first MRC accreditation for retail media measurement. This is an important step forward as we help to unify the ecosystem. MRC accreditation of our retail media measurement means that the data provided by Criteo is certified to the level of the currency data used in buying and selling traditional media and digital display, and therefore is comparable. Our measurement can be used to make decisions across platforms and media buys. This accreditation underscores our reliable and advanced measurement capability for both on-site sponsored products and on-site display ads and represents a significant step forward to drive larger brand investments in retail media. We're also working with key third-party verification leaders like integral ad size and double verify, to enable viewability and invalid traffic measurements across our network of retailers. Overall, we expect significantly more dollars to continue to shift to retail media because it helps brands take advantage of retailers' increasingly valuable first-party data to connect with consumers. 83% of agencies rate the performance of retail media spend as more effective than other channels in terms of sales impact, according to our recent ecosystem survey. Today, more than half of brands and agencies in all regions are investing in retail media, both on-site and off-site.