Criteo S.A.

Good morning and welcome to Criteo's second quarter 2024 earnings call. All participants will be in a listen-only mode. Should you need assistance, please press 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 Melanie Dambry, Vice President, Investor Relations. Please go ahead.

Good morning, everyone, and welcome to Credo's second quarter 2024 earnings call. Joining us on the call today, Chief Executive Officer Megan Clarkin and Chief Financial Officer Sarah Glickman are going to share some prepared remarks. Both persons, our Chief Product Officer will join us for the Q&A session. As usual, you will find our investor presentation on our investor website now, as well as our prepared remarks and transcripts after the call. Before we get started, I would like to remind you that our remarks will include forward-looking statements which reflect critical judgment, assumptions, and analysis only as of today. Our actual results may differ materially from current expectations based on a number of factors affecting critical 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 forms 10-K and 10-Q filed 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. Finally, unless otherwise stated, all broad comparisons made during this quarter are against the same period in the prior year. With that, let me now hand it over to Megan.

Thanks, Melanie, and good morning, everyone. Thank you for joining us for our second quarter earnings call. And what a quarter it's been for Credio. I'm excited to share that we delivered another strong performance with double-digit organic growth for the third consecutive quarter. Notably, we achieved record top-line and adjusted EBITDA margin for Q2. These results reflect the outstanding work of our teams who are driving momentum across our business. Before delving into this quarter's performance, I'd like to address Google's recent announcement to move away from their original plan to fully deprecate third-party cookies on Chrome. They are now proposing a new framework to continue to support third-party cookies with user choice. This means that we expect to benefit from ongoing access to third-party signals for opted-in users and that Google will continue to support privacy sandbox for opted-out users. As a result, we expect that any given scenario would lead to a smaller signal loss impact than previously anticipated. We look forward to our continued collaboration with Google to shape this new framework. Although it's premature to pinpoint the timeline and precise impact of this change, we welcome this good news. which provides more clarity and publisher stability, ultimately benefiting the entire advertising landscape. Our next generation addressability strategy remains unchanged, with additional strength coming with the news of more third-party signals. We remain confident in our ability to provide scalability and runtime interoperability of privacy-safe solutions for a more open, unified, and efficient ecosystem that supports multiple addressability options. Our vision is quickly coming to life as we continue to transform our company into a commerce media powerhouse. We continue to build out capabilities that focus on reaching consumers throughout their buyer journey from discovery to purchase, leveraging our unique commerce data assets, best-in-class AI, and our supply and demand side relationships creating a flywheel effect and making us the perfect platform for a unified commerce media ecosystem. Partnerships are vital when scaling our value for all marketers and media owners. Over the past few years, we've worked closely with Microsoft to bring commerce audiences to the high-quality native advertising we deliver on Microsoft properties. And we're now excited to extend our longstanding partnership with Microsoft to our retail media suite. Our most recent announcement reinforces the belief that the world of retail media is converging and together, Criteo and Microsoft can play a more central role in unlocking its full potential partners and for clients. The collaboration with Microsoft is twofold. First, We're excited to bring Microsoft Advertising's extensive demand to our global network of 225 retailers. This first-of-a-kind integration will enable retailers to tap into new budgets from Microsoft's 500,000-plus advertisers, expanding the value and reach of their inventories in the process. Integration, design and planning are underway and we look forward to capitalizing on this opportunity together as more budgets shift to retail media. Second, Microsoft chose Criteo as their preferred on-site partner and we're working to consolidate their retail media supply onto our platform. The transition of these retailers from Microsoft advertising to the Criteo platform is expected to start in 2025. We expect this to further strengthen our position as the leading ad tech player in retail media, while creating an even more unified access for all media buyers. Our shared focus on AI innovation is a unifying force behind our expanded partnership. Together, we aim to elevate retail and monetization and advertiser outcomes across the consumer journey, tapping into world-class strengths and predictive modeling to drive privacy-enhancing targeting, product recommendation, campaign workflows, and creative formats. We're incredibly excited with this work and the opportunities that working with Microsoft on AI unlocks. On top of this exciting development with Microsoft, we continue to gain market share in retail media in the second quarter with 30% year-over-year growth and retail media activated media spend, outpacing the market. We have a leading market footprint, including 65% of the top 30 retailers in the Americas and 50% of the top 30 in EMEA. And we believe we've become the hub of retail media to complement Amazon. We had notable retailer wins across all regions over the past few months. In the US, we're excited to partner with new large retailers, including Dollar General, QVC, and Belk. In Europe, we're proud to work with Euronics, a global leader in distribution of home appliances and electronics. And we expanded our relationship with MyTeresa, a global luxury e-commerce retailer that is now using both our performance marketing and retail media capabilities. We're also partnering with luxury department store Selfridges to power the online retail media advertising technology on their e-commerce website. Lastly, we're broadening our retail media presence in APAC and LATAM, including new retailers in Peru, and Brazil. These retailers are coming to us for 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. Our momentum carries into adjacent verticals, such as tech-enabled services. For instance, we added Grab, a leading app in Southeast Asia, providing everyday services such as mobility, deliveries, and digital financial services to over 38 million users. We've also seen strong demand and revenue growth for Uber Eats since we expanded our partnership to the spirits and beverages category across various regions earlier this year. Importantly, we continue to experience strong client retention and expansion. Our multi-year and often exclusive contracts with deep technical integration contribute to the stickiness of our retail media business. We're also very encouraged to see that over half of our retailers in the Americas and EMEA are leveraging multiple ad formats for their retail media network, building out their advertising offering. A recent example is the expansion of our DocMorris partnerships with the launch of native video ads. This activity drives scale. We added about 200 new brands in Q2, and we're pleased to see agencies lean in with our commerce media demand-side platform, or DSP, as we give them a single entry point to reach our valuable network of retailers. In the US, agency spend accelerated sequentially, and we saw the major holding companies grow more than 50% year over year. As a result, agencies now account for two-thirds of Commerce Max spend in the U.S. This quarter, we launched further capability on Commerce Max with our new SKU-based planning tool. This further enables brands and agencies to buy sponsored product ads across our 225 retail media networks within one simple consolidated workflow. Instead of executing campaigns on multiple retail media networks individually, brands and agencies can leverage our DSP to promote their products on any retailer and our network where their product is sold. all in one streamlined campaign activation with management and optimization workflow and closed-loop measurement. This allows marketers to focus on what really matters, selling products. In turn, it's expected to bring more demand for a larger number of retailers, enabling brands to reach the majority of world's retail supply outside of Amazon. Commerce Max also brings demand to off-site campaigns, meaning using retailers' data assets to extend their reach across open internet inventory. French toy giant Joy Club is a recent addition to our off-site campaigns that we run with our DSP in Europe, and we're currently bringing one of the biggest US retailers on board. Turning to performance media, which encompasses our targeting capabilities, including retargeting commerce audiences and our supply and ad tech services. We're seeing continued strong momentum for commerce audiences, up 41%. We're leveraging the largest set of commerce data and shopping intent signals on the open internet to reach valuable audiences across the entire shopping journey to drive more sales and grow customer lifetime value. Similar to prior quarters, we benefited from the accelerated adoption of first-party data-driven solutions, successful cross-selling efforts, AI-driven performance enhancements, and incremental third-party demand through our Commerce Grid SSP. Today, 80% of our performance media revenue Excluding supply and ad tech services comes from clients using commerce audiences in addition to retargeting. This was always our goal, and we're continuously innovating to appeal to a larger pool of potential clients. Our retargeting solution has returned to growth for the second quarter in a row, including the growing activation of Meta's large-scale inventory in combination with open internet inventory. We're pleased to see continued success across our Facebook and Instagram campaigns and in reach with performance. For example, read.co.uk, one of the UK's leading careers marketplace, partnered with Criteo to assess authenticated social environments and effectively link open web candidate intent to social channels. Our integration with Meta enabled them to generate thousands of additional applications while reducing the cost per application by approximately 8%. We launched our Commerce Grid supply-side platform, or SSP, a year ago, and we're pleased with our progress to date. Commerce Grid gives agencies and brands access to our commerce audience packages with publisher inventory for highly targeted campaigns, through third-party DSPs like Google's Display and Video 360. It represents another path for us to capture incremental commerce media budgets and leverage the power of commerce media at scale. We continue to grow our premium roster of publishers and most recently added top names like the New York Times. We also introduced new commerce formats like Plana, which is the first payment app to launch advertising with Commerce Grid, and we're already seeing high demand for its high shopping intent environment with our large base of performance clients. The strength of our data assets combined with our best-in-class AI put us in a unique position to pioneer the future of performance advertising. As a reminder, the objective of our comprehensive addressability strategy is to add value throughout the consumer buying journey with relevant, personalized, and trusted advertising while meeting our clients' performance expectations. We leverage our deep learning models at the intersection of proprietary interest groups, commerce data, and media data across retailer sites, social media platforms, and the open internet. This work sits as the foundation of Criteo's commerce media platform, serving both sides of our business with advanced targeting capabilities that set a new performance paradigm and ensure consumer privacy and control. To conclude, we're right where we said we'd be as we progress through our transformation to be a world-leading commerce media platform. We have strong conviction towards our business strategy And we're well positioned to drive sustainable, profitable growth in 2024 and beyond. We recently announced the promotion of key leaders to further propel growth and continue building momentum in retail media and performance media. We're ready to see the exciting opportunities ahead. And we remain committed to delivering shareholder value. And please save the date for our upcoming Retail Media Investor Update. that will be a live webcast on November 18th. You will get a chance to hear from our leadership team who will provide an update on our retail media business and the opportunities ahead. With that, I'll hand the call over to Sarah who will provide more details on our financial results and our outlook. Sarah.