Criteo S.A.

Good morning and welcome to Credio's third quarter 2025 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 the number one. To withdraw your question, please press star, then the number two. Please note this event is being recorded. And I would now like to turn the conference over to Ms. Melanie Dambray, Vice President, Investor Relations. Thank you. Please go ahead.

Good morning, everyone, and welcome to Credo's third quarter 2025 earnings call. Joining us on the call today, Chief Executive Officer Michael Komaczynski and Chief Financial Officer Sarah Glickman are going to share some prepared remarks. Joining us for the Q&A session is Todd Persons in his role as Chief Product Officer. 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 reflect critical judgment, assumptions, and analysis on the as of today. Our actual results 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 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 gap metrics are included in our earnings release published today. Finally, unless otherwise stated, all gross comparisons made during this call are against the same period in the prior year. With that, let me now hand it over to Michael.

Thanks, Melanie. And good morning, everyone. Thanks for joining us today. What excites me most about this quarter isn't just the strength of our results, but how our business is growing into a platform that reaches far beyond any single channel or format. Consumer attention is more fragmented than ever across websites, apps, social feeds, connected TV, and now AI-driven assistance. That fragmentation creates complexity for advertisers, but it creates opportunity for us. Criteo is built to meet shoppers wherever they are and deliver the outcomes brands care most about. Progress we're making in performance media, in retail media, and in agentic AI shows our strategy is working and our opportunity is only expanding. In stepping into this role, I focused on getting close to our teams, our clients, and our partners. And what I see gives me confidence that we are on the right path. We're building on our strengths and sharpening our focus, and we're seeing early results from our push for greater decentralization and agility. Our purpose is clear. We power shopper journeys that unlock commerce outcomes. We help brands, agencies, and retailers connect with consumers wherever they are across every channel and every device. We've evolved from being an open web company to a diversified multi-channel platform with about 85% of our media spend now happening outside of desktop display. Retail media represents roughly half of our spend with strong growth across mobile, social, and video, including CTV. This cross-channel diversification continues to set us apart from single-channel ad tech players and walled gardens. Criteo's diversified reach across these channels is a core strength that's often underappreciated. Our platform enables consistent, measurable returns across channels, delivering stronger performance than siloed alternatives. As advertisers focus on outcomes rather than media buying, they're looking for the ability to accurately measure performance across a variety of consumer touchpoints. Our data, our AI, and our global reach create a foundation that gives us a distinct competitive edge to deliver measurable outcomes for our clients. With this strong cross-channel foundation in place, we're now focused on the next major shift shaping our industry, the rise of agentic AI. This is a natural extension of our strategy. Intelligent assistants are starting to guide people through their shopping journeys, helping them discover, compare, and choose products in new ways. We see this as another channel where brands will want to engage because every major shift in digital has created more fragmentation, not less. We're moving fast to prepare for this future. Our MCP server is live and has powered our first client campaigns, proving the flexibility of our platform and new workflows. In performance media, we've developed new agents that let brands generate audiences or surface insights instantly, removing friction from data workflows. In retail media, we're piloting sponsored recommendations within retailer agents. These are clear signs of how our platform adapts to new behaviors and new channels. Looking ahead, the opportunity is to bring together the proven performance of recommendation systems with the usability of large language models. Our performance engine keeps getting stronger with every AI innovation we deliver, including our latest deep learning bidding model, and it's powered by one of the most complete sets of commerce data in the market. We combine normalized product information from thousands of e-commerce players with a global map of how people search, browse, consider, and buy across categories. This curated view of products and shoppers reveals the connections that predict intent, and enable precise product recommendations. It gives us a data set that is uniquely structured, granular, and scalable, making our recommendations more accurate, more actionable, and ultimately more valuable for clients and partners. And it's an advantage that is very hard to replicate. We're thrilled to be partnering on a proof of concept with a major AI powered assistant to explore how our technology can seamlessly integrate into their ecosystem, a strong signal of how relevant we believe Criteo will be in the next phase of digital commerce. This includes exploring how integrating our product recommendation API into product level search can drive incremental performance and relevance for users. Turning to performance media, This part of our business is in the midst of an exciting transformation. We're moving from a managed service model to a self-service AI-first platform that can serve customers more broadly and capture a greater share of their budgets. This shift matters because self-service not only lowers cost to serve, but also opens the door to a much larger market by allowing our technology to integrate within partner ecosystems and reach a broader universe of SMB advertisers. At the center is our Go solution, where momentum is building quickly for our small and mid-sized clients. For example, one in four campaigns from small clients now run through Go, up from just 10% last quarter, and we expect that to double again by year-end. Go simplifies performance marketing through automation and built-in optimization, driving higher spend, lower churn, and stronger return on ad spends. Go is also accelerating adoption in social, which now accounts for approximately 35% of our Go campaign revenue. As we continue to expand cross-channel access and full funnel capabilities, we see significant opportunity ahead. Progress we're making reinforces our confidence that performance media will become an even stronger growth engine for Criteo going forward. Our engine is purpose-built to optimize performance holistically across channels and throughout the full buyer journey. Social is a great example. With more than 3 billion daily active users, its share of performance media business has nearly tripled since last year. Cross-channel, full-funnel campaigns for large enterprise clients drove five times more new users and positive incremental return on ad spend. proving that our engine delivers true performance lift across CTV, social, and video. We're also extending into connected TV, which is emerging as a new performance channel. Marketers can activate CTV campaigns through our commerce growth demand solution or our commerce grid supply-side platform, and the results are compelling. A food brand tripled household exposure, and a luxury fashion brand lifted transactions per user by 50%. revenue per user by 25%, and new buyers by 7%. With Criteo still under-penetrated in the second fastest growing part of the digital advertising ecosystem, CTV represents a significant multi-year growth opportunity. Another area where we see significant opportunity is with our marketplace offering, which allows marketplaces to offer their merchants Criteo's targeting and retargeting tools.