Q4 and F Y 2017 F inanc ial Re sults Inve stor Pre se nta tion Upda te d Ma rc h 2018
Safe har bor state me nt This presentation contains “forward-looking” statements that are based on our management’s beliefs and assumptions and on information currently available to management. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, projections, competitive position, industry environment, potential growth opportunities, potential market opportunities and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “seeks,” “estimates,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements represent our management’s beliefs and assumptions only as of the date of this presentation, and nothing in this presentation should be regarded as a representation by any person that these beliefs or assumptions will take place or occur. You should read the Company’s most recent Annual Report on Form 10-K filed on March 1, 2017, including the Risk Factors set forth therein and the exhibits thereto, and the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 8, 2017, completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. This presentation includes certain non-GAAP financial measures as defined by SEC rules. As required by Regulation G, we have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is available in the Appendix slides. 2 •
Compe lling inve stme nt the sis Cle ar str ate gy Pr ove n Attr ac tive L ar ge mar ke t Compe titive moats oppor tunity tr ac k- r e c or d financ ial pr ofile T e c hno lo g y Stro ng c lie nt g ro wth F a st g ro wth Co mme rc e Ma rke ting Build the hig he st with 90% re te ntio n Sc a le a nd is q uic kly e me rg ing a s pe rfo rming a nd o pe n Inc re a sing ne two rk e ffe c ts E xc e e de d g uida nc e the ne xt b ig c o mme rc e ma rke ting pro fita b ility 17 q ua rte rs in a ro w Ope nne ss ma rke ting c a te g o ry e c o syste m Stro ng c a sh flo w 3 •
We ar e the le ade r in Comme r c e Mar ke ting. Commerce Marketing focuses on inspiring people to buy things and is measured by performance, directly driving sales and profits for marketers.
Comme r c e mar ke ting is de e ply r oote d in our DNA Technology Performance Scale Global Presence 5 •
Our vision Build the highe st Conne c t shoppe r s to the De live r pe r for manc e at pe r for ming and ope n things the y ne e d and love sc ale to par tic ipating Comme r c e Mar ke ting r e taile r s and br ands E c osyste m 6 •
T he Cr ite o Comme r c e Mar ke ting E c osyste m 7 •
Crite o Shoppe r Gra ph: one of the world’s la rg e st da ta se ts foc use d on shoppe rs Three trusted data collectives Carefully designed using our guiding principles Open Transparent Two-way exchange of data Clear and permission-based usage Secure Fair Highest data security and privacy Value gained exceeds contribution 8 •
Offe ring da ta - drive n solutions a c ross the e ntire shoppe r journe y • Criteo Sponsored Products • Criteo Dynamic Retargeting • Criteo Customer Acquisition BETA • Criteo Audience Match BETA 9 •
Our lar ge sc ale dr ive s str ong ne twor k e ffe c ts 1.2B+ 6x shopper 17,000+ individual users engagement matched Retailers & Relevance Commerce Shopper 1,000+ Brands Sales Publishers $29B+ annual 1,000s of $615B+ post-click sales premium publishers annual online commerce sales 10 •
Why do mar ke te r s wor k with Cr ite o Pe r for manc e at sc ale T r uste d par tne r Ope nne ss • Integrated, purpose-built technology • No competing business agendas • Access to 90%+ commerce activity • Massive reach across media and • Our success is entirely aligned with • Transparent data usage and reporting retailers marketers’ • Enriched data shared back into • Machine learning on $615B+ marketers’ systems commerce sales and 600TB+ daily shopper data 11 •
Our busine ss mode l has unique attr ibute s Attractive Direct 910 84% Direct relationships Net client additions per quarter 1 with clients 2 Sticky Elastic Demand ~90% 77% Differentiated in Marketing Client retention rate 3 Of Revenue ex-TAC from uncapped budgets 4 1 On average over the last four quarters through Q4 2017 2 Last twelve months to Q4 2017; excluding Criteo Sponsored Products 3 On average over the last 25 quarters through Q4 2017; including all products 4 On average over the last four quarters through Q4 2017; excluding Criteo Sponsored Products. Represents uncapped 12 • budgets of our clients, which are either contractually uncapped or so large that the budget constraint does not restrict ad buys
Our e xisting c lie nts c onsiste ntly inc r e ase the ir spe nd with us Average revenue per client cohort (quarterly) $140,000 Client cohorts Q1-13 Q2-13 $120,000 Q3-13 Q4-13 Q1-14 Q2-14 $100,000 Q3-14 Q4-14 Q1-15 Q2-15 $80,000 Q3-15 Q4-15 Q1-16 Q2-16 $60,000 Q3-16 Q4-16 Q1-17 Q2-17 $40,000 Q3-17 Q4-17 $20,000 $0 Number of 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 quarters Excluding Criteo Sponsored Products. This client cohort analysis tracks the quarterly spend of clients since inception of their relationship with Criteo. 13 •
As a r e sult, a lar ge por tion of our busine ss is r e c ur r ing Revenue per client type 92% 90% 90% 89% 88% 2013 2014 2015 2016 2017 Existing clients New clients A and Criteo Sponsored Products. Includes Criteo Dynamic Retargeting, Criteo Customer Acquisition B E T A , Criteo Audience Match B E T Existing clients in a given year are clients that started working with Criteo prior to that given year. 14 • New clients in a given year are clients that started working with Criteo within that given year.
Dir e c t r e lationships with pr e mium c omme r c e c ompanie s and br and manufac tur e r s Commerce: Retail, Travel and Classifieds Brands over 18,000 clients* * 18,118 clients at the end of Q4 2017 15 •
Dir e c t par tne r ships with lar ge , high quality publishe r s ALL MAJOR PUBLIC EXCHANGES, GLOBAL AND LOCAL PREFERRED ACCESS TO PREMIUM MEDIA INVENTORY PREFERRED ACCESS TO RETAILER INVENTORY 16 •
Our se lf- r e infor c ing c or e c ompe te nc ie s ar e diffic ult to r e plic ate 17 •
Our gr owth str ate gy is base d on two str ong pillar s Gr ow the e c osyste m Inc r e ase our value for c lie nts and par tne r s • Evolve go-to-market strategy for Tier 1 and midmarket • Enhance core technology • Leverage our powerful Shopper Graph • Further scale midmarket operations worldwide • Develop and upsell new products • Drive international expansion of - for commerce clients Criteo Sponsored Products - for brand manufacturers • Broaden supply of quality inventory 18 •
We inve st in gr owing ar e as in Comme r c e Mar ke ting • Look alikes* Marketing Flexible audience-targeting platform objectives • App Install* Shopping • CRM onboarding* Omnichannel marketing environments • Store-to-web retargeting* • In-App Media Incremental inventory • Video Criteo Shopper Graph, built on data pooling among ecosystem participants, is the foundation of all new product investments 19 • * Prospective
F ast, pr ofitable gr owth and str ong c ash flow – Q4 2017 • Grew Revenue ex-TAC 20% 1 to $277 million, • Continued to innovate core technology Adj. EBITDA 36% 1 to $120 million, • Engine improvements, Free Cash Flow 10% 1 to $54 million • Criteo Shopper Graph, • Transparency initiatives • Added 820 net clients in Q4 to >18,000 and maintained client retention at ~90% • Launched new products Criteo Audience Match BETA and • Grew same-client Revenue ex-TAC 6% 1 Criteo Customer Acquisition BETA • Grew Criteo employees 10% • Criteo Direct Bidder now deployed to 2,800 across 30 offices worldwide with 1,500 large publishers worldwide 20 • 1 At constant currency
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