Criteo S.A.

Good morning and welcome to Criteo's fourth quarter and fiscal year 2024 earnings call. All participants will be in 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 Dumbray, Vice President, Investor Relations. Please go ahead.

Good morning, everyone, and welcome to CREDO's Post-Quarter and Fiscal Year 2020 for Earnings Board. Joining us on the call today, Chief Executive Officer Megan Clarkin and Chief Financial Officer Sarah Glickman are going to share some prepared remarks. That person, our Chief Product Officer, will join us for the Q&A session. As usual, you will find our investor presentation on our investor relations 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 reflects credo's judgment, assumptions, and analysis only as of today. Our actual reserves may differ materially from current expectations based on the number of factors affecting credo'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-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 growth comparisons made during this fall 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 today. As we enter 2025, I'm thrilled that Michael Komisinski will be stepping in as our new CEO. I'm confident that he's the right leader to take the reins and continue to execute against Criteo's vision and the exciting journey ahead. With over 20 years of ad tech expertise and a proven track record of driving accelerated growth and AI-driven innovation all at scale, Michael brings a sharp focus on execution and agility to keep building on the momentum we've created. He'll officially join us on February 15th, and for my part, I remain deeply passionate about this company and its future, and I'll be available to ensure a seamless transition. Looking back at the past five years, I'm incredibly proud of what we've accomplished together, from a single product retargeting solution, which was in decline, to a multifunctional platform addressing ad tech needs in the fastest growing sector of advertising, commerce media. Our momentum is evident as we continue to deliver strong results, with 2024 being our best year to date. We've become the platform of choice for the buying and selling of commerce media, with promising prospects for the future. We've come a long way from that point solution business. It's been an incredible journey, and as I pass the baton, I do so with excitement for what I know that Criteo can achieve. Let me start off by sharing our top-level results for 2024. Our high saving ratio and strong execution have translated into double digit growth for the third consecutive year, while also expanding our adjusted EBITDA margin for the second consecutive year. These record results reflect the outstanding work of our teams who are driving us forward every day. A highlight for us was the shift of our top line mix, where we wrapped up 2024 with our retail media business exceeding $250 million in revenue. We bolstered our position as the leading independent retail media ad tech provider and continued to gain market share in 2024 with a remarkable 31% year-over-year growth in media spend, which translated to above $1.5 billion. Our momentum keeps building. If I zoom out and focus on Pretio's strategy, we're laser focused on bringing together our most powerful assets. From our legacy of best of breed performance targeting, to our direct access to thousands of websites that attract consumers along their buyer journey, to our privileged access to retailer data and premium inventory, we've developed a commerce media platform that seamlessly consolidates the buying and selling of commerce-focused ads at scale. The flexibility of our platform to extend beyond traditional audience reach and enter ROI and attribution at scale is the promise that Criteo can make. To deliver high ROI optimized attribution measured consistently and to industry standards is our direction. a direction that will propel digital advertising to the next level. Our strategy is focused on ensuring a unified commerce experience, which is central to the future of advertising. With two decades of commerce AI and rich data from our supply and demand side partners, we deliver targeted ads throughout the buyer journey from discovery to purchase. Our goal is to empower advertisers with full funnel strategies that reach shoppers across multiple channels, optimize performance, and seamlessly integrate first-party data for enhanced personalization, and to activate it all through the video commerce media platform. We've successfully elevated and differentiated our positioning in the market, and we're proud to have major enterprise clients like Macy's now utilizing all parts of our platform to meet their needs. This includes our demand side capabilities with Commerce Growth and Commerce Max, and our supply side solutions through Commerce Grids and Commerce Yield. Our holistic commerce media value proposition, independence, and AI-driven best-in-class performance are our key differentiators. Importantly, Our platform value proposition positions us to win with agencies, which continue to be a strategic channel for us. Our agency business growth outpaced the growth of the rest of our business in 2024, and we expect to accelerate further on this momentum. We're excited to see that our major whole code agencies increasingly leverage our comprehensive commerce media platform as an enterprise play. We're thrilled to announce the recent renewal and expansion of our three-year U.S. partnership with a leading holding agency to now become a global strategic deal leveraging more of our platform's powerful commerce solution. Our expanding agency relationships are a testament to the value of our strategic focus and industry-leading capability. When it comes to retailers, we understand their need. and we're proud that they trust Criteo with more ad placements, ad formats, first-party data than ever. As we highlighted during our retail media update, we have a unified offering set up for scale. We've created a flywheel, meaning the more retailers we partner with, the more brands we attract. Our multifaceted demand strategy helps Brands and agencies scale while our modular approach and professional services supports retailers' growth in the fastest-growing advertising channel. We recently secured significant new retailer partnerships worldwide as part of our exciting strategic collaboration with Microsoft Advertising, and we're happy to announce five new retailer wins across regions. Those retailers are expected to launch in the first half of 2025. Meanwhile, we're making great progress with our tech integration with Microsoft Advertising on the demand side, and we look forward to testing beginning in the first half of the year. In EMEA, we're thrilled to announce a new partnership with Harrods in the UK, expanding our presence in the luxury department store category. We delivered another quarter with over $150 million in agency spend going through our Commerce Max DSP in the U.S. alone, resulting in more than 50% growth with U.S. holding agencies in 2024. Our strength in retail media has been largely driven by our work in powering sponsored ads for our clients. We see this as an on-ramp for newer formats that represent a growing opportunity. These include display ads, video, and off-site advertising. Retailers benefit most when they take a holistic approach to their media strategy, and that's exactly what our platform enables. Most recently, we launched new on-site formats, including display with Albertsons and Giant Eagle, and video ads with Costco and Douglas. We've also been seeing an uptick in the adoption of retail media offsite campaigns where retailers extend their advertising reach across the open web. We have about 30 retailers now participating in this opportunity with Criteo, including the recent addition of one of Europe's leading toy retailers, Dewey Club. Meanwhile, We're pleased to see that 3,500 brands are now leveraging our platform globally to reach shoppers across multiple retailer sites. In 2024, we added 1,000 brands, which is three times the number of brands we added in 2023. Our retail media business continues to perform well. With strong growth and a leading market position, we feel great. about our program. Now turning to performance media, we delivered strong growth in commerce audiences, up 32% this year, while retargeting grew slightly. Retargeting represents 40% of our business as we exited 2024, compared to close to 90% of our top line in early 2020. Today, we're positioned at the forefront of the changes in our industry, We believe we're prepared for any scenario and we no longer plan our business around the deprecation of third-party cookies. The combination of our advanced AI and unique access to commerce data to achieve high-performance outcomes for clients has enabled us to secure more targeting budgets. With a strong track record of delivering the performance our clients demand, We're the ideal partner to execute full funnel strategies and drive measurable results at every stage of the buyer journey. We're encouraged by our recent success in capturing budgets from traditional open web upper funnel DSPs. Our advertisers are seeing benefits when they plan, buy, and optimize across multiple channels, including open web and social. In Q4, we saw a 45% sequential increase in media spend allocated to our social campaigns as we help our clients and reach with performance. For Facebook and Instagram, we're excited to expand our offering beyond retargeting, enabling advertisers to activate method inventory at the SKU level for our commerce audience campaigns in 2025. Our testing for commerce audiences shows a significant performance uplift with Methodist large-scale inventory and powerful communities. So we're moving to general availability this quarter. With social proving to be an effective channel for bringing commerce recommendations and experiences to consumers, we plan to expand into more social environments in the future. Our AI innovation fuels our growth and continues to set the stage for our future success. In 2024, we saw significant advancements in AI-driven performance as our Criteo AI Lab has continued innovating to optimize campaigns and unlock additional budgets. Promise Go is our next-generation AI-powered automation and optimization toolset. It's designed to make campaign creation and management faster and easier and was rolled out in Q4. We're rapidly advancing towards the self-service model to drive scale, enabling clients to launch a campaign in just five clicks. Our clients value the easy setup and are pleased with the results they're getting as our advanced AI automates decisions around audiences, channels, ad formats, and creatives to maximize results. We're off to a great start and very pleased with the activation of hundreds of campaigns with Commerce Go since the beginning of Q4. We've seen great adoption with small clients driving more than half of our Commerce Go revenue, and this is expected to remain a big area for us in 2025. As Credio enters 2025, we're focused on growing our scale through cross-selling, upselling, and the expansion of our strategic partnerships to fully harness commerce media. We see the ongoing convergence of commerce and advertising as an opportunity to shape the future of advertising by leveraging our massive commerce data, 20 years of AI expertise, and innovative ad formats to drive product discovery, engagement, and sales. Powered by our AI engine, which processes trillions of intent signals. We deliver personalized product recommendations across 5 billion SKUs, enhancing the shopping experience, increasing basket sizes, and maximizing sales for clients. We're operating from a position of strength with the best competitive position we have ever had. We're excited to seize the opportunities ahead and confident in our strategy to drive sustainable, profitable growth and shareholder value. Everything we've achieved has been a true team effort driven by our talented videos and valued clients. And I personally want to express my deepest gratitude to our investors for your unwavering support. The foundation we've built is stronger than ever, and with Michael at the helm, I believe Criteo is well-positioned to continued growth and success. With that, I'll turn the call over to Sarah, who'll provide more details on our financial results and our outlook.