Criteo Q2 Bottom-Line Surpass Street View

Criteo S.A. CRTO reported a second-quarter FY22 contribution ex-TAC decline of 3% Y/Y to $215 million, missing the consensus of $220.81 million.
Contribution ex-TAC from Marketing Solutions declined 8% to $177.97 million, and Retail Media grew 36% Y/Y to $36.56 million.
Revenue decreased by 10% Y/Y, or 3% at constant currency, to $495 million.
Criteo's activated media spend rose 9% Y/Y in constant currency to $676 million.
Adjusted EBITDA was $50 million (-26% Y/Y), and margin contracted 800 bps to 23%.
Non-GAAP EPS of $0.58 (-8% Y/Y), beating the consensus of $0.43.
Cash flow from operating activities decreased 47% year-over-year to $14 million in Q2.
CRTO held cash and equivalents of $563 million as of June 30, 2022, after spending approximately $21 million on share repurchases in the quarter.
Criteo completed the acquisition of AdTech platform company IPONWEB on August 1, 2022.
"We are on pace to deliver sustainable and profitable growth in 2022, and we remain confident in our long-term growth outlook. With our strategic acquisition of IPONWEB and our share buyback program, we are deploying our capital to accelerate growth and drive near- and long-term shareholder value," said CFO Sarah Glickman.
3Q22 Outlook: Criteo sees contributions ex-TAC of $223 million - $229 million, against the consensus of $225.15 million. Adjusted EBITDA of $48 million - $53 million.
FY2 Outlook: Criteo expects Contribution ex-TAC to grow by 11% - 14% at constant currency, including the contribution from the IPONWEB acquisition.
It sees an Adjusted EBITDA margin of ~30% - 31% of Contribution ex-TAC and a Free Cash Flow conversion rate of about 45% of Adjusted EBITDA.
Price Action: CRTO shares traded higher by 6.24% at $26.74 on the last check Wednesday.

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