0001576427-25-000108
SEC filingCriteo's Q2 2025 revenue grew 2% to $482.7M, but operating income declined 18% on higher R&D expenses including accelerated amortization from the cookie deprecation reversal.
For the three months ended June 30, 2025, Criteo reported revenue of $482.7 million, up 2% from $471.3 million in the prior-year period. This growth was driven by an 11% increase in Retail Media revenue, partially offset by flat Performance Media. Gross profit improved 11% to $258.5 million, with gross margin expanding from 49.4% to 53.6% as traffic acquisition costs declined 7%. Despite this, operating income fell 18% to $30.5 million, and net income dropped 18% to $22.9 million ($0.40 per diluted share vs $0.46). The decline was primarily due to higher research and development expenses, which included $7.9 million in accelerated amortization and a $0.9 million impairment charge related to intangible assets developed for third-party cookie deprecation—a response to Alphabet's decision not to deprecate cookies in Chrome. Excluding these nonrecurring items, adjusted EBITDA decreased 4% to $89.4 million.
As of June 30, 2025, Criteo held $205.7 million in cash and cash equivalents, down from $290.7 million at December 31, 2024. Total assets fell to $2.114 billion from $2.266 billion, largely due to a $133 million decline in trade receivables. Total liabilities decreased to $986.6 million from $1.185 billion, primarily reflecting lower trade payables and income taxes payable. Shareholders' equity increased to $1.088 billion from $1.049 billion, driven by retained earnings and a reduction in accumulated other comprehensive loss. The company maintains a revolving credit facility of €407 million, providing additional liquidity. Overall, the balance sheet remains solid, with ample liquidity to fund operations and share repurchases.
Operating cash flow for the first half of 2025 was $60.9 million, up from $31.2 million in the same period last year, reflecting higher net income and improved working capital. Capital expenditures (including intangible assets) totaled $52.3 million, or 5.6% of revenue, in line with management's guidance of at or slightly above 5% for the full year. Free cash flow (operating cash flow minus capex) was approximately $8.6 million, though the company does not explicitly report this metric. Cash used in financing activities was $103.1 million, largely reflecting $104.5 million in share repurchases.
Management highlighted that Retail Media continues to scale, with revenue up 14% in the first half of 2025, while Performance Media was flat. A key risk is the curtailment of services by the largest customer (4.6% of FY2024 revenue) starting November 1, 2025. The company also noted ongoing macroeconomic uncertainties, including changes in global trade policies and inflation, which could impact advertising demand. On the positive side, Criteo is investing in its Commerce Media Platform, leveraging AI and privacy-safe solutions to capture market share. Capital expenditures are expected to remain at or slightly above 5% of revenue for 2025. No specific revenue or earnings guidance was provided for the remainder of the year.
Segment Performance: Retail Media generated $60.9 million in revenue (up 11% YoY) and contributed $60.0 million in contribution ex-TAC. Performance Media revenue was $421.8 million (up 1%) with contribution ex-TAC of $232.1 million (up 9%). The company’s segment profitability measure, contribution ex-TAC, increased 9% overall to $292.1 million.
Share-Based Compensation: Total equity awards compensation expense was $37.2 million for the first half of 2025, down from $48.0 million in the prior year, primarily due to the full vesting of lock-up shares from the Iponweb acquisition.
Goodwill: Goodwill increased to $534.9 million from $515.2 million at year-end, primarily due to currency translation adjustments.
Contingencies: The company recorded a $31.7 million provision for non-income tax risks related to the Iponweb acquisition, offset by a full indemnification asset. Additionally, Criteo is appealing a €40 million CNIL fine and faces two putative class action lawsuits filed in July 2025.
Share Repurchases: During the first half of 2025, Criteo repurchased 3.2 million shares for $104.5 million at an average price of $32.80. As of June 30, 2025, $114.7 million remained under the $805 million board authorization.