Criteo S.A. ((CRTO)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Criteo’s recent earnings call painted a picture of robust growth and innovation, particularly in Retail Media and product launches, while also acknowledging challenges in the retail sector and broader macroeconomic uncertainties. The sentiment during the call was optimistic about the company’s strategic direction, despite some hurdles in the ad tech services and retail sectors.
Solid Q2 Performance
Criteo reported a strong performance in the second quarter, achieving a revenue of $483 million and a contribution ex-TAC of $292 million. This marks a 7% growth year-over-year at constant currency, showcasing the company’s resilience and ability to capitalize on market opportunities.
Retail Media Growth
Retail Media was a significant driver of Criteo’s success, with media spend reaching nearly $400 million, a 20% increase year-over-year. This growth was supported by over 4,000 brands globally, highlighting the expanding influence of Retail Media in Criteo’s portfolio.
Successful Product Launches
In June, Criteo launched its auction-based display technology, which has already been adopted by 16 retailers. The company expects this number to double shortly, indicating strong market interest and potential for further growth in this area.
Strong Agency Partnerships
Criteo expanded its global partnership with dentsu and renewed a significant agreement with another major holding company. These partnerships leverage Criteo’s full Commerce Media Platform stack, underscoring the company’s strategic alliances in the industry.
Positive Outlook for Performance Media
Performance Media revenue reached $422 million, with a 6% increase in contribution ex-TAC at constant currency. This growth is supported by AI-driven audience modeling technology, positioning Criteo well in the competitive landscape.
Challenges in Retail Sector
The retail sector presented challenges, with lower budgets in the U.S. and a 6% decline in retail, particularly affecting fashion and department stores. These challenges reflect broader industry trends impacting Criteo’s operations.
Ad Tech Services Decline
Criteo’s ad tech services faced a downturn due to reduced spending by a large client in the media trading marketplace, highlighting a specific area of concern within the company’s broader service offerings.
Macro Environment Uncertainty
The company adopted a cautious approach to guidance, citing uncertainties in the macro environment and potential reductions in ad budgets for discretionary categories. This prudent stance reflects the unpredictable economic conditions impacting the industry.
Slow Start to Q2
Criteo experienced a slow start to the second quarter, with improvements in macro trends only beginning in May. This delayed recovery underscores the challenges faced at the beginning of the quarter.
Forward-Looking Guidance
Looking ahead, Criteo provided a positive outlook for 2025 despite macroeconomic uncertainties. The company anticipates a 3% to 4% year-over-year growth in contribution ex-TAC at constant currency, with Performance Media expected to grow by mid-single digits. Retail Media is projected to grow in the low to mid-single digits, excluding specific client dynamics. The adjusted EBITDA margin is forecasted to be between 33% and 34%, with continued investment in AI innovation and long-term growth.
In summary, Criteo’s earnings call reflected a strong performance and strategic growth initiatives, particularly in Retail Media and product innovation. Despite challenges in the retail sector and macroeconomic uncertainties, the company remains optimistic about its future prospects, supported by robust agency partnerships and a positive outlook for Performance Media.